CHESHIRE East Council says its predicted overspend for this financial year has reduced by £6.5m but warned ‘further urgent action is needed’ to bring spending back in line with budget.

At the end of the first quarter of the financial year, the council had predicted an overspend of nearly £27m by the end of March 2025.

A report to next week’s meeting of the finance sub-committee says that forecast gap has now been reduced by £6.5m.

But the report warns: “While an improvement on the first financial review of £6.5m, the forecast overspend of £20.1m remains a significant financial challenge for the council.”

It says the council’s forecast level of reserves are £10m and ‘is therefore insufficient to cover the current forecast revenue outturn for the year without further action’.

The council applied to the government in February for exceptional financial support of £17.6m.

One of the key requirements for that was it had to produce an improvement and transformation plan and submit it to the government – which it has done.

If the council doesn’t rein in its spending it will have to use the conditional exceptional financial support to avoid the issuing of a S114 notice – which means effective bankruptcy.

Cheshire East has set up a strategic finance management board to look at its expenditure and determine whether it is absolutely necessary.

It is also looking at income and grants and examining council contracts.

The report says: “In addition, any directorate that is identified as being off target by more than five per cent is now subject to a detailed finance and performance review on a weekly basis through a financial recovery review process.

“This includes a detailed action plan, identifying what can be done to sustainably reduce the pressure and gaining assurance over the management of those actions to deliver improved financial outturns.

“This process has been put in place for adults’ services and children and families and is being chaired by the S151 officer.”

The meeting of the finance sub-committee takes place on Thursday, November 7 at 10am at the council’s Westfields offices in Sandbach.