BURY Council is forecast to overspend its budget by more than £6 million this year.

A monitoring report that was due to be submitted to the council’s cabinet last night projected an overspend of almost £6.4 million, based on spending from the first quarter of the financial year.

The figure, described as “very worrying” by councillors, would represent five per cent of the council’s overall budget, which has been cut by £65 million since 2010 as a result of reductions in Government funding.

An action plan has been drawn up to combat the predicted overspend, which will include a recruitment freeze, the releasing of all casual or agency staff, and the ceasing of overtime pay.

Senior managers at the council have been tasked with implementing “radical” proposals for their departments to bring spending under control.

Cllr Jane Lewis, deputy leader of the Council, said: “Any projected overspend is serious, but I would stress that this is a forecast; we have not overspent by this amount, but it is a warning that we must take remedial action now to avoid any such overspend.

“Secondly, it is a quarter one forecast; meaning that we have the remainder of the year to put in place any necessary measures to further reduce spending and work has already started on this.

“A series of additional housekeeping measures have been circulated to all staff to further enhance controls around spending.

“Executive directors have been told to prepare turnaround plans, no matter how radical, to ensure the forecast overspend is brought under control.”

Most of the projected overspend — almost £4 million — comes from the Children’s, Young People and Culture budget, because of issues such as continuing increased demand for Children’s Agency placements, home to school transports for children with special educational needs, and support for young people who have left care.

The council is forecast to overspend its Communities and Wellbeing budget by £3.4 million and its Resources and Regulation budget by £1.4 million.

However, non-service-specific spending is anticipated to come in £1.8 million under budget.

The report adds that the council’s debts, as of June 30, totalled £191.5 million. The council borrowed £7 million in the first quarter and it is anticipated that further borrowing will be undertaken this year.

Cllr Lewis added that a letter has been sent to the Government, drawing attention to the fact that Bury receives far below the national average Government settlement.

Bury receives £294.45 of funding per head, compared to an average £342.46 in England, and £390.99 across Greater Manchester.

She said: “I am confident that we can achieve a sustainable financial position, despite the impact of this Government’s austerity agenda and the ongoing funding disparity we are subject to.

“However, serious consideration will have to be undertaken about the level and variety of council services we can provide in future — clearly we can only provide what we can afford.”

Cllr James Daly, deputy Conservative group leader, said: “If the projected overspend proves to be an accurate forecast, it is yet more evidence of the catastrophic mismanagement of Bury Council’s finances by the Labour Party.

“Bury Council is already overly reliant on the income it receives from private-sector investments and without this there would be no chance at all of a balanced budget.

“The fixed costs of the council are out of control and the Labour Party has done virtually nothing to increase income generation or put in place any sort of sustainable plan to address these underlying financial issues.

“The council should immediately form a cross-party committee of councillors whose sole task would be to formulate a long-term economic plan to ensure Bury’s finances are sustainable and in a position to provide the frontline services our residents deserve.”

Cllr Tim Pickstone, Bury Liberal Democrat leader, said: “Although it is only early in the financial year, to be forecasting such significant overspending for the council is very worrying, and certainly the worst I can remember for many years.

“I accept that some things are outside the control of the council, like the impact of the economy, but many others are for the council to control. It really is unacceptable that in so many areas we are failing to keep to budgets, sometimes over multiple years.”