A CONTROVERSIAL decision to axe free school transport for hundreds of children failed to produce the expected savings – with Monmouthshire Council predicting a £500,000 overspend on its budget.

Other factors forcing the council into the red are the UK Government’s decision to hike National Insurance contributions for employers, higher than expected inflation, a failure to fully achieve agreed £10 million savings and costs associated with last month’s Tour of Britain cycle race.

The overhaul of school transport, which meant children would only get a free bus pass if they live more than two miles from their primary, or three miles from secondary school, failed to deliver expected savings, as some routes were judged unsafe for walking and free transport reinstated.

The council has also warned that its 35 schools will hold a collective deficit balance of more than £6m at the end of March, which has increased by nearly £3m from the beginning of the year.

Spending and forecast spending for the remainder of the financial year is expected to exceed the £236,778,000 budget agreed in March by more than £1.1m, although some underspends reduce the expected overspend to £533,000.

The 18 schools with deficit budgets, which mean they expect to spend more than they are funded for, must get their recovery plans into County Hall for approval by October half-term.

They are expecting to draw a further £2.8m from the school reserve, which as a result would be £6.9m in the red, a figure which will impact the council’s overall financial resilience.

Councils had been expecting the Welsh Government to meet in full the additional costs from the NI increases announced by UK chancellor Rachel Reeves in last October’s budget, but in July it was confirmed the Labour government in Westminster would only partly meet the cost for the Welsh public sector.

As a result councils have to fund their shortfalls, though Labour-led Monmouthshire had put an £850,000 contingency in place which covers an outstanding £811,000 following the £2.51m received from Cardiff Bay.

The council is also continuing to experience high demand on children’s and adults social services, despite having increased their overall budget this year, and changes to how they work haven’t yet resulted in expected savings.

It is currently forecasting it will achieve 92.1 per cent of the £10.7m savings budgeted for.

The penultimate stage of the Tour of Britain Cycle race started in Pontypool on the first weekend of September and the route took in Usk, Llanishen north of Chepstow, Monmouth, Abergavenny, finishing on the Tumble on the Blorenge.

Monmouthshire Council made a £25,000 contribution to the race organisers and also had to find a similar amount to cover road closures, cleaning and security, making a £50,000 overspend that hadn’t been budgeted for at the start of the year.

The council has said it is working to address underlying costs, and budget mitigation measures include trying to use grants, where possible, to cover its core costs, management of vacancies and how it can use capital receipts if buildings or land are sold.