Cheshire East Council is facing a predicted overspend of £27m by the end of this financial year because both its children's and adults' services are failing to operate within budget.

A report to last night's (Thursday) meeting of the finance sub-committee revealed the adults and health committee is forecast to be overspent by £20m at the end of March next year.

Children and families is likely to be £7m over budget if action is not taken.

Both services have been under pressure because of a rise in demand.

The finance sub-committee has recommended the corporate policy committee now scrutinises these overspends and asks the chairs of both committees to explain what is being done to tackle the problem.

Conservative group leader Janet Clowes said: "We have a duty to refer to corporate policy [committee] those items that we see as being special.

"I would rather try, if we can, to be nipping things in the bud, or at least understanding what mitigations adults and children are putting in, to meet these additional pressures sooner rather than later.

"And with that in mind, could we add a recommendation that this committee recommends to corporate [policy] that they examine children and adults as special budget areas for consideration as their performance lies outside the parameters of the MTFS (medium term financial strategy)?"

Cllr Stewart Gardiner (Knutsford, Con) agreed, saying: "These are significant overspends.

"The corporate policy committee needs to be aware of them and to be basically bringing those committees to account and seeing how they intend to resolve the problem."

Former council leader Sam Corcoran (Sandbach, Lab), who was present as a visiting councillor, had asked at the beginning of the meeting what was being done about this £27m predicted overspend.

"I can understand overspends when inflation had suddenly leapt up to 10 per cent and we had budgeted for less than five per cent, but inflation has not increased since the budget was agreed in February," he said.

"Are the forecasts worst case scenario, best case or most likely? That actually has a big impact on what action should be taken."

He suggested a review of financial controls to look at extra scrutiny of payments outside budget, how variances are reported to managers and what action is taken if they are not on budget.

Interim head of finance Adele Taylor said the council as a whole 'has to learn to live within our means'.

A strategic finance management board has been set up to look at expenditure and whether what was being spent was absolutely necessary, to look at income and grants and to examine council contracts.

Ms Taylor gave details of some measures, including how spends of over £5,000 were being questioned to ensure they were necessary, adding the council was doing everything, as would be case if an effective bankruptcy notice (S114) had been issued – which it hasn't.

"These are things that are very similar, that if you were in a 114, we've kind of put in place the steps that you would do," she said.

The finance boss added: "Any directorate that is overspending by more than five per cent, I meet with them on a weekly basis.