BURY'S beleaguered social services are heading towards a £3.1 million overspend by the year's end.

Finance bosses have flagged up the potential crisis just three months into the current financial year.

They are having to draw £1 million from earmarked reserves to help balance the budget. A further £1 million is expected to come in through housing benefits to people in old folks homes, and £300,000 savings have been found.

But even after that, the department is still facing a shortfall of £800,000.

Two areas are mainly to blame: an extra £1.1 million in children's agency placements, because of a significant increase in the number of children who have to be placed outside the borough. Bury is paying for 33 children, and some packages of care can cost six-figure sums.

A further £1.25 million is attributed to the increasing demand for community care.

Council leaders had anticipated that the frequently-overspent department would run into trouble, and set aside £1 million in this year's budget to meet such emergencies. They say the overspend will remain the top financial priority for the council this year.

However, Councillor David Higgin, Tory group leader, told Wednesday's (Sept 11) executive that the figures were "appalling".

"To be £800,000 in the red even after doing the sums, it's still a lot of money," he said.

"You knew it was going to be like this, yet it's only when we get a report that says £3 million that we really look up and do something about it. It should have been done 12 months ago, action should have been taken before now."

But Labour council leader John Byrne said that these problems were being faced by councils across the country.

And he criticised Coun Higgin, saying he had proposed spending the £1 million in reserves on keeping down the council tax.

Coun Mike Connolly, executive member for social services, said: "No-one is saying that it's good, but we would be looking at a £1.8 million overspend if Coun Higgin had had his way, just for cheap political popularity. It proves we were right when we set the budget."

Mr Mike Owen, director of finance, said this was "not something which came out of the blue. We took action to bring it into line, but demand put the budget under pressure".

The financial report also revealed that the education department is on course to overspend by £400,000.

A quarter of this comprises the cost of educating children outside the borough, plus £80,000 in extra bus escort charges, along with a £64,000 overspend in the lifelong learning youth service.