Haringey Council will be forced to raid its reserves to plug a £16 million budget gap due to a failure to make planned savings.

The council will use £7.5 million from reserves to make up the deficit, which is mainly caused by higher-than-expected spending on children’s and adults’ services.

But it will still be left with a £6 million overspend in its general fund at the end of the current financial year and will have to look for other ways of making savings in order to balance its books.

This comes on top of a £2.6 million overspend in the dedicated schools grant.

At a cabinet meeting last night (Tuesday, September 11), Cllr Patrick Berryman, cabinet member for finance, outlined plans to set up a budget delivery board to help identify potential savings.

He said: “The idea is to act early and take a realistic approach to some of the savings that were scheduled for some of the areas like children’s and adults, where councils across London and across the country face difficulty in delivering these as they currently stand.

“It doesn’t mean we have given up on those savings. That is why we have set up a budget delivery board to try and continue to push those.”

Cllr Berryman said looked-after children, the first response team in children’s services, and care packages in adult social care were the main areas in which forecast savings could not be made.

The £7.5 million used to plug the deficit has been drawn from the council’s budget resilience reserve, which was set up in 2017.

The cabinet report states that the council is expected to make only a third (£5.2 million) of the savings that were earmarked for the current financial year.

Cllr Liz Morris, opposition leader and Liberal Democrat member for Highgate, asked if the council would take the savings shortfall into account when proposing new spending increases, such as the council tax reduction scheme.

Cllr Berryman said the council was taking a cautious approach and admitted “we need to be looking really rigorously at other budget areas to make up the shortfall”.

He added: “The council tax reduction scheme is a priority, it was in our manifesto – that we were elected on – and £1.2 million for that we consider a priority spend.

“That is something we want to deliver, subject to consultation, but we will look at everything we spend money on to see where we can best spend our money.”

Cllr Morris added: “Is setting up a new board an adequate response to the scale of mis-savings?”

Cllr Berryman replied: “I think the budget a year ago was set with the anticipation of using reserves, which in the end wasn’t necessary.

“You could argue perhaps this budget should have been set up with the same caution put in it – that these savings are getting harder to deliver for everyone now in adults and children.

“After quarter one we have seen that they are going to be hard to deliver, so we have acted in possibly what should have happened at the start of the financial year.

“We might need reserves until these savings can be delivered and until we have got new savings on the table.”

Cllr Emine Ibrahim, deputy leader and cabinet member for housing and estate renewal, said the council had failed to make savings because it was avoiding making spending cuts that would have a “hugely detrimental impact on our residents”.

The cabinet approved the use of reserves to plug the gap and the setting up of the budget delivery board.