Dundee City Council expected to overspend by £4m as cost cutting savings fail to materialise

Dundee City Council is facing a projected overspend of more than £4m this year as it battles to save money.

A new report has revealed the local authority’s overspend in its general fund has risen by about £800,000 from last month’s estimate.

It means the council is expected to spend £4.1m more than it had budgeted for this year, with some savings failing to materialise and growing costs in other areas.

The latest predictions come as the council is also facing having to find nearly £13m worth of savings next year.

The council’s latest financial report on its spending this year says councillors previously agreed £4.4m worth of savings by cutting 100 posts from budgets across various services.

These savings were expected through a combination of voluntary retirements or redundancies and the non-filling of vacancies.

However, £2.2m of those savings have yet to be achieved.

While service reviews are ongoing, the report warns: “There remains a risk that some of these savings will not be delivered in full this financial year.”

To date, the council anticipates only £1.1m will be achieved, resulting in a shortfall of the same amount.

Meanwhile, the report also reveals that increasing demand and costs associated with third-party payments in the children’s social work and early years services are also putting financial pressure on the authority.

Early years is projecting an overspend of £1.5m “due to the number of children and volume of hours of care that are currently being funded”.

Other areas of overspend at the authority include the council’s corporate fleet with an overspend of £896,000 and unplanned repairs and maintenance works for council buildings.

The report outlines a financial recovery plan to “ensure this position reduces”, including:

Only recruiting to vacant posts deemed essential
Restricting overtime to essential areas only
Services being asked to implement planned 2027-28 savings earlier where practical
Restricting discretionary expenditure to essential spending only

Councillors will discuss the latest financial report on Monday.

A public consultation on next year’s budget cuts is set to launch late.