Why it matters: The deficit represents a scale of problems the authority had not anticipated when setting its budget in February, with finance lead Councillor Richard Smith MVO warning the picture may not improve significantly by next year.
The big picture: County cabinet members discussed budget forecasts after the first quarter ending in June on Tuesday, revealing an overspend that must be filled by reserves projected to fall by £18.7 million by March 2026.
The council is set to miss its £28.4 million savings target by £4.7 million, with half of this shortfall directly attributed to complications from the local government reform process.
What's being held back: Certain efficiency measures have been postponed due to uncertainty over what reform will mean for services, including a review into potentially merging the county council's two call centres.
Councillor Smith said this was the "wisest thing to do" given the uncertainty surrounding the reform, which will see Suffolk's six county, district and borough councils replaced by unitary authorities with more powers by May 2028.
The details: As has been the case across councils nationwide, the biggest pressures come from the authority's children and young people's directorate, which Councillor Smith described as "one of our biggest priorities".
Councillor Bobby Bennett, the council's children and young people lead, explained extreme cases of external residential placements could cost as much as five new foster care placements.
"Acknowledging this reality does not mean we accept it," she said. "It means we must be smarter, more efficient and more effective in how we deliver our services.
"We are partway into a root and branch transformation of children's services – it's not about making cuts, it's about fundamentally rethinking and improving every part of our work."
Education funding crisis: The council faces an even more severe challenge with special educational needs and disabilities (SEND) services, with the High Needs Block forecasted to overspend by £64.4 million by February.
Councillor Andrew Reid, whose portfolio includes SEND, pointed out Government funding was insufficient to meet demand, with increasing costs driven by independent specialist placements, top-up funding for struggling schools, and bespoke education packages.
Currently, councils can accumulate Dedicated Schools Grant overspends through a "statutory override" without affecting their books, but Suffolk is set to be £161 million in the red when this protection expires in March.
What they're saying: "The deficit will not be expunged by the end of the year – I hope, by some extent, it may be mitigated, but this is a budgetary pressure which we will have to live with," Councillor Smith said.
Councillor Reid added: "It is a complex picture within this area [...] but one which we continue to face head on. We know our financial risks and challenges and remain prudent and measured in our approach."
What's next: The Government is set to outline its plans for the statutory override with its promised overhaul of the SEND system.
Councillor Smith stressed the authority maintained a "high level of budget discipline" and would continue finding ways to be more efficient, though he warned the financial picture may not improve significantly by February.
The bottom line: Suffolk County Council's budget deficit will persist into the next financial year, with council reform creating additional complexity as the authority manages rising demand for services against constrained resources.
