DORSET Council is predicting an overspend of more than £10m for this financial year, a new report has said. 

The local authority’s senior councillors are warning of “difficult decisions” on the horizon to plug a £8.6m black hole that the new Lib Dem administration said it inherited from the Conservatives. 

Dorset Council has a budget of £367.7m to spend this financial year, but the Lib Dems are claiming there is a 2.7 per cent overspending (£10.1m). 

Last year’s budget ended with an overspend of £15.9m in service budgets, offset by central finance adjustments of £14.9m, resulting in a net £1m overspend. 

Finances at the council are under “extreme pressure” because of increased demand on children and adult social care, rising costs of delivering statutory services and reduced funding. 

But the new Lib Dem administration also reintroduced a £2m ‘cost of living’ fund out of its finances and has cut some car park prices, expected to lose about £300k in revenue. 

Dorset Council said the bulk of the predicted overspend had been anticipated and previously reported as it relates to £8.6m to be saved from the council’s transformation programme, details of which will be finalised in the autumn. 

But the local authority has also said it is waiting on the new Labour government to set out the likely funding arrangements for councils in October’s budget. 

Simon Clifford, cabinet member for finance at Dorset Council, warned “difficult” decisions may be on the horizon to balance the books. 

He said: “We face a challenging budget situation, as do nearly all councils across the country.  

“The 2024/25 budget was set by the previous Conservative administration, and as the new administration we have inherited it, including the £8.6 million black hole. 

“It is essential for us to understand the developing financial performance and projected position this year and we are acting quickly to make sure that resources are used efficiently to deliver the council’s services in a sustainable way.  

“This may involve some difficult decisions.  

“As councillors our focus now is to address and reduce the forecast budget gap for year-end. We have asked senior officers to work to reduce the forecast overspend over the coming weeks.” 

A report will be set out to Dorset Council’s cabinet on September 10.