Kirklees Council projects its budget overspend will be ‘lowest since Covid pandemic’

At the end of the 2022/23 financial year, the local authority recorded a sizeable £27m overspend on its budget. This was attributed to the impacts of the cost of living crisis and increased demand on services, as well as the fallout from the pandemic.

While pressures have persisted in the years that followed, with millions of pounds overspent each year, Kirklees Council has been moving in the right direction when it comes to its financial outturn.

In 2023/24, the council ended the year with a £7.3m overspend, and in 2024/25 a £5.6m deficit was reported at year end.

Looking at the latest figures for the past year (2025/26), the local authority has projected a £4.1m overspend on its £396m budget at the end of the third quarter, with this the lowest since the pandemic.

The figure is several million less than the forecasted overspends for the equivalent period in previous financial years.

But it has taken difficult, often unpopular, decisions for the local authority to get into a more stable position and dodge a Section 114 Notice, or effective bankruptcy.

When the financial difficulties peaked in 2023, the council needed to find £47m to balance the books, which saw a recruitment freeze, end to non-essential spending and service cuts rolled out.

The council’s recently approved budget for 2026/27 requires that a total of £10.7m in savings are made, with £6.7m of this to be from new savings.

A financial monitoring report for quarter three of the 2025/26 financial year was brought to the attention of the council’s overview and scrutiny panel at their latest meeting, with Chief Financial Officer, Kevin Mulvaney, giving an update.

He said: “It’s clearly still a concern that the council is overspending, but as members can see in the cover report, the projected overspend is the lowest since Covid and I do expect this position to improve by the year end.”

Mr Mulvaney highlighted the “ongoing pressures”, particularly in adult and children’s social care as a result of demand for services, the complexity of cases and cost of individual placements. These two services alone were said to be projecting an overspend of £14m.

A £2m overspend relating to home to school transport was also highlighted.

To offset the challenges, the local authority has been working to save cash, with measures such as managing staff vacancies, rationalising assets and reviewing fees and charges in place.

The council is also using £5.5m of its budget contingency reserve to improve its financial position.

Inflation is said to remain a concern for 2026/27, depending on the length of the conflict in the Middle East.

Mr Mulvaney said that this is expected to impact fuel costs in the immediate term but energy and gas less so, as the council is already tied into contracts.