A CASH-STRAPPED council will be forced to make drastic cuts after forecasting a multi-million pound overspend.

A new financial forecast for Redcar and Cleveland Borough Council is predicting a £3.5m overspend on children’s service at the end of the financial year.

The majority of that money has been spent on children in care and children on the edge of care, as well as transport for children getting to school.

Overall, the council is predicting a year end overspend of £4.2m.

Redcar and Cleveland is not the only council whose children’s services are facing financial difficulty, with Durham County Council yesterday forecasting a £0.83m overspend for the year, largely because of costs involved with providing placements for children.

Redcar and Cleveland Borough Council documents say the figure represents a “significant budgetary over-spend” and will require “a number of mitigation measures to balance the budget”, both on a temporary and permanent basis.

The documents, which will be discussed before Redcar and Cleveland Borough Council’s cabinet next week, state: “Members will be aware of the significant pressures around looked after children.

“Spending in this area has increased significantly in recent years and is now approximately £10m.

“This is a national issue with the majority of councils experiencing the same situation and, following a significant lobbying, a study has been commissioned by the government.

“The children in care pressures have continued to grow in the first quarter of 2018/19 and are now causing the council to further review and support the children and families’ directorate service and budget, as continuing to have increased costs is likely to impact on the overall funding resources of the council.

“The council are investigating this forecasted position and are assessing the non-discretionary services in the directorate for their direct effectiveness on both mitigating demand and achieving value for money.

“A new model for how the council resources this demand led service will need to address the scarcity of additional resources in local government.”

The council has been forced to cut £76.4m from its budget since 2010, resulting in the loss of more than 1,000 jobs in the period.

Six years ago, Redcar and Cleveland Borough Council revealed it was tackling a £6.8m overspend on its adult and children's services.

An Audit Commission report found the council did not have robust systems and processes in place to secure a stable financial position and manage financial risks.

Report author Lynne Snowball identified "significant weaknesses in financial planning and control arrangements" leading to the overspend.