Sutton Council has been forced to dip into its reserves as it faces going £5 million over budget.

The council’s finance boss warned the authority was in “survival mode” as inflation hits record highs.

At a meeting on Monday night, councillors were told more than half of the projected overspend, £3m, was in its social care budget.

The department has seen an increase in the number of looked-after children and “high-cost placements”.

The overall £5m forecasted overspend, halfway through the year, is also being put down to high inflation.

To battle this, the council is set to release £2m from its contingency and another £2m from its inflation reserves, as well as £800,000 from its recovery reserve.

Lead member for resources, Councillor Sunita Gordon, said: “We are currently predicting a £5m overspend across service budget, mainly due to pressures in children’s social care coupled with high inflation.

"After this government’s fiscal event which was more of a fiasco, we are all feeling the impact in our everyday lives.

“At this stage, we believe the overspend can be covered by contingency in earmarked reserves identified at the end of the last financial year.

"My concern is we are back in survival mode on how to protect council services and residents alike from this unsympathetic government and its policy of double austerity that will be felt by all in the coming weeks and months.”

Council leader Ruth Dombey warned that the council is facing a “very difficult” time.

She said: “Everyone knew that the aftermath of the Covid pandemic was going to be difficult for everyone but nobody could have anticipated the level of inflation that we are seeing at the moment or the very real risk of going into a prolonged recession next year.

“Clearly times are very difficult indeed, I think it is right at this stage to be dipping into our reserves, that’s what reserves are for a rainy day and it has been raining a lot recently. 

"At the time being, we are coping but it is very difficult, very tight.”