Tough decisions and hard bargains ahead in Dudley Council budget talks

Dudley councillors are set for tough talking as negotiations begin to set next year’s budget with pressure on limited finances.

The authority has a legal duty to set a balanced budget for the 2027/28 by March 11 which means councillors must vote in favour of spending plans by that date.

After local elections in May there was no group in the council chamber with an overall majority though Conservatives have the largest number of councillors and are in charge of the administration.

While Tories fill the seats at the cabinet table their plans for the budget could be defeated if other groups vote against their proposals in full council.

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Negotiations will be taking place for the rest of the year so political leaders can reach agreements on a spending plan they can all support.

The council has dedicated budgets for education, public health and housing but many other vital services are paid for from the general fund, which was set at £393m in February 2026.

The biggest headache for council financial planners is caused by the departments of adult social care and children’s services which are being forecast to account for £248.5m of spending in the current financial year.

Children’s services is predicted to overspend by £4.6m due to increased demand, expensive residential placements and high costs including for agency staff.

Next year’s budget for children’s is also set to face pressure as the council recruits new social workers after a report by Ofsted published in August found workloads were too high and the service was rated ‘inadequate’. 

Adult social care is another area where tough decisions may be needed as politicians wrangle over priorities.

The last financial forecast predicts a £100,000 underspend which is helped by staffing savings of £3m and client income of £1m however the future looks less comfortable.

A recent meeting of the council’s adult social care scrutiny committee was told demand for adult social care remained high, driven by an ageing population, increasing complexity of need and health inequalities.

After making big savings to avert possible effective bankruptcy, the council has succeeded in delivering what is acknowledged as a more stable financial position however a gap between income and spending will continue which, if unchecked, will reach £11.7m by 2030/31 according to figures published in February.

The cost of services for children with special educational needs or disability (SEND) is covered from a ring-fenced Dedicated Schools Grant (DSG) but pressure from increasing demand is high.

The 2025/26 DSG grant was £12.9m in the red as a result of a £15m overspend in the high needs SEND budget.

While the council is battling to bring services back into the borough rather than paying for more costly external provision, the latest prediction for the current financial year shows a SEND increase in the overspend to £18.4m.

The council is committed to increasing its reserves which became perilously low and were predicted to run out this year if no action was taken.

In August the council said it had built reserves up to £64m after making significant savings but Dudley is still below the average of reserve levels for comparable authorities and politicians will need to consider how much more to put away for a rainy day rather than spend on services.