Officials at Hertfordshire County Council are forecasting a £23.4m budget overspend, based on the first three months of the 2026/27 financial year.

A £1.2bn budget to deliver services – including social care, education, highways, public health, trading standards and the fire service – throughout 2026/27 was set by the council back in February

But increasing demand for children's and adult care services, a failure to make planned savings quickly enough and the scale of a nationally agreed pay award for staff are said to have increased the financial pressures on the council.

This week councillors will hear that – based on spending from the first three months of the financial year, April to June – the council now expects to overspend by £23.4m by the end of March 2027.

And as a result, as part of a new 'recovery approach', council departments are being asked to reduce spending and to address the underlying causes of the financial pressures.

The latest financial position will be outlined to a meeting of the council's resources and performance cabinet panel on Wednesday (October 7).

According to a report published in advance of that meeting, the budget set by the council in February "was considered robust and reflected the best information available at the time".

Nevertheless, officers now point to the impact of increasing demand for and cost of council services – particularly within children's services and adult care services – over the first six months of the calendar year.

Data shows that children's services are now expecting to overspend by £12.2m by the end of 2026/27 – with £9.3m of that attributed to the costs associated with 'looked after' children.

And adult care services are now forecasting an overspend of £5.1m, which is said to be primarily driven by pressures within 'older people' (£3.5m) and by a shortfall in income from chargeable services.

Officers also highlight a £7.3m shortfall in the delivery of £58.5m planned savings.

The council's focus, according to the report, is now on delivering recovery actions that reduce the forecast overspend, minimise the use of contingencies and support the rebuilding of reserves.

And commenting on the position in advance of the meeting, executive member for resources and performance Cllr Chris Lucas (Liberal Democrat, Hitchin South) said he was confident effective action was being taken.

"Back in February of this year, we set a robust and realistic budget for 2026/27 which includes £1.5 billion spending to continue delivering the high-quality services that residents, communities and businesses across Hertfordshire value and rely on," he said, in a statement issued in advance of the meeting

"Like other councils across the country, we are facing unprecedented growth in demand, particularly in our social care services for adults and children, as well as higher than expected inflation driven by conflicts across the globe.

"Combined with the so-called 'Fair Funding Review' which negatively affected Hertfordshire more than many other areas, delivering more for less has become ever more challenging.

"Despite this, I am confident that we are taking effective action to tackle the projected overspend now and develop a strong budget for next year that will provide the fiscal security we need by focussing on innovation to transform our services while continuing to deliver good outcomes for residents.

"Teams across the council are working to reduce costs within each of their departments in both the short and long term.

"Particular focus is being given to our social care services where the financial pressures are highest.

"We will set out further details of this work in our next Budget Monitor in November."

The financial position will be discussed at a meeting of the council's resources and performance cabinet panel on Wednesday (October 7).