By Bruce Fegen

FIFE’S EDUCATION budget for the current financial year is projected to be more than £4 million in the red, councillors will hear today.

Members of the children’s services committee will be told the position would have been much worse had £1.5 million of savings not been identified and that a recruitment freeze on all posts, excluding teachers and school support staff, is being considered to try to further reduce the overspend.

The huge rise in energy prices, increased staff costs and a carry forward from last year’s overspend are highlighted as the main reasons for the service being a projected £5.702 million in the red, although this has been offset by £1.501 million of corrective action which has already been taken.

In a report to the committee, education head Ken Greer says demand for early years services, pension costs and school transport costs are also major contributory factors to the overspend, which equates to 2% of the total £286 million revenue budget.

Like all energy users, Fife Council has been faced with soaring bills and with 190 buildings to heat and light, the education service is particularly vulnerable.

The budget had allowed £3.7 million to cover this but it is now expected this will be exceeded by almost £1.65 million by the end of 2006/7. “This represents a considerable challenge,” Mr Greer says.

On staffing costs, which account for two-thirds of the budget, he says that variances have arisen in inflationary assumptions for pay awards along with staffing levels continuing to be higher than budget provision.

“The service will continue to seek opportunities to align staffing levels to budget provision. It is important to highlight this as a significant area of concern in the current financial projections,” the education chief continues.

Another significant concern flagged up by Mr Greer is how the Scottish Executive is administering the probationary teacher scheme and, in particular, the allocation of resources which follow the scheme.

He states, “It is widely recognised that there is a significant funding shortfall from the Executive in relation to the implementation of reduced class contact time (RCCT). Fife Council’s share of this shortage is estimated at approximately £1 million.

“It is also known that £30 million is currently withheld outwith the local government financial settlement to provide additional resources to councils to employ additional probationary teachers which would have the added benefit of contributing to the RCCT commitment.

“Of course, this only happens if the council receives its appropriate share of resources from the Executive.”

As well as the recruitment freeze, work is ongoing to identify further savings, a review of secondments across the services is being carried out and tighter budgetary control is being applied to additional grant income, Mr Greer says.

Meanwhile, the social work budget is also heading for a £1.606 million overspend. Once again, the situation would have been much worse had it not been for the implementation of savings measures, in this case totalling £4.521 million.

The projected overspend, which totalled £6.127 million before the cost-cutting exercise, is mainly due to increased costs of £4.474 million in placements for children in residential care or with foster parents.

More than 90% of placements are as a result of decisions made by the Children’s Panel and are outwith the control of Fife Council, social work boss Stephen Moore and finance chief Brian Lawrie say.

They also point out that the budget for fees and payments to foster carers will be in the red to the tune of £1.079 million.

There is also a huge projected overspend on adult placements—£3.125 million—but this is partially offset by a projected underspend in relation to Lynebank Hospital, Dunfermline.

The savings suggestions, which will not impact on service delivery, include applying £1.505 million of balances, transferring aids and adaptations from revenue to capital, rigorously applying the eligibility criteria for home care in favour of high and medium priority clients and using underspends in areas such as youth justice and improving fostering.