A major Devon council is still expecting to overspend by more than £5 million this year even though it has clawed back cash in major areas.

Devon County Council’s cabinet heard finance leaders were predicting a £5.4 million overspend this financial year, but this was an improvement on an earlier estimate.

That’s because it has saved £2.4 million, with a roughly even split coming from its adult social services department and its children’s services.

And the situation continues to deteriorate within its schools budget, which is kept ring-fenced from its other day-to-day spending.

The council now expects to overspend by £61.6 million – a rise of £4.2 million compared to its last overspend prediction.

Councillor James Buczkowski (Liberal Democrat, Cullompton), the cabinet member for finance, said the administration was being “honest about the scale of the challenges”.

“Progress is being made but a £5.4 million overspend is still a serious position and not one we should be relaxed about, albeit there has been an improvement.”

Cllr Buczkowski said there had been “tighter financial controls” and “better scrutiny of placements” within its key social care services, and that the reduced use of agency staff had also had a positive impact on coffers.

“Our planned savings are on track,” he added, “and that’s despite the loss of some of our originally planned savings and the need to identify others.”

He added the outcome was “cautiously encouraging”, adding that there was still time in the financial year to try and reduce the overspend.