Issue - meetings

Further to Minute No. C118 of a meeting of the Cabinet held on 21st December, 2011, consideration was given to a report presented by Andrew Bedford, Strategic Director of Resources, detailing the unprecedented level of savings (£30.3m) resulting from the withdrawal of Central Government funding and grant allocations. The budget process focused on the customers the Council served, the communities and businesses of Rotherham and as a first course of action, the Council’s management and administration and back office costs were streamlined.

The report provided details of progress on the delivery of the Revenue Budget for 2011/12 based on performance for the first eight months of the 2011/12 financial year and it was currently forecast that the Council would overspend against its Budget by £7.393m (3.4%). This showed an increase in overspend of £470k compared to the budget monitoring report for the first six months of 2011/12.  The main reasons for the forecast overspend were:-

·              The continuing service demand and cost pressures in looking after vulnerable children across the Borough, which were also being felt both nationally and locally by a large number of councils;

·              Additional, one-off property costs relating to the continued rationalisation of the Council’s asset portfolio as part of the efficiency drive to reduce operational costs; and

·              The extended timescale for realising the full forecast management and business support savings of £1.45m.

Further savings were expected from Neighbourhoods and Adult Services as a result of additional funding, but Members were made aware of the significant pressures being faced by the Council.

A discussion and question and answer session ensued and the following issues were raised and clarification sought:-

·              Allocation of reserves to meet the funding gap.

·              Use of New Homes Bonus to support general expenditure.

·              Measures in place to mitigate risks of not balancing the budget between now and the end of March, 2012.

·              Staffing reductions and the delivery of savings.

·              Scrutiny of external contracts and the realisation of savings and value for money.

·              Upfront costs associated with staffing reductions and forward planning.

·              Review of Children and Young People’s Services and its structured budget deficit.

·              Review of partner contributions.

·              Insufficient budget allocation in “Other Children and Families Services” to meet the needs of care leavers.

·              One off budget savings such as in Regeneration and Planning restructures.

·              Shortfall in Neighbourhood Services and the period this covered.

·              Repercussions of underspends offsetting overspends, especially in Neighbourhoods and Adult Services.

·              Significant Local Government budget reductions and the comparisons to other Local Authorities.

Resolved:-  (1)  That the progress made to date in delivering the significant financial challenges presented in the Council’s Revenue Budget be noted.

(2)  That any further actions be suggested to Directorates so as to minimise the impact on the Council’s medium term financial position.

-        Strategic Director of Resources to report.

Councillor Akhtar, Deputy Leader, introduced a report by the Strategic Director of Resources which stated that in setting the 2011/12 Revenue Budget the Council had to manage an unprecedented level of savings (£30.3m) resulting from the withdrawal of Central Government funding and grant allocations. It did this by ensuring the budget process focused on the customers the Council serves, the communities and businesses of Rotherham. Consequently, as a first course of action, management and administration and back office costs were streamlined.

The report provided details of progress on the delivery of the Revenue Budget for 2011/12 based on performance for the first eight months of the 2011/12 financial year.  It was currently forecast that the Council would overspend against its Budget by £7.393m (3.4%). This showed an increase in overspend of £470k compared to the budget monitoring report for the first six months of 2011/12.  The main reasons for the forecast overspend were:-

·              The continuing service demand and cost pressures in looking after vulnerable children across the Borough, which were also being felt both nationally and locally by a large number of Councils.

·              Additional, one-off property costs relating to the continued rationalisation of the Council’s asset portfolio as part of the efficiency drive to reduce operational costs.

·              The extended timescale for realising the full forecast management and business support savings of £1.45m.

Management actions had been put in place to address some of the issues identified to date and work was being undertaken to identify further actions. As these took effect they would be monitored to enable the impact of the actions to be assessed. Careful scrutiny of expenditure and income across all services and close budget monitoring, therefore, remained essential.

Resolved:- (1)  That the progress made to date in delivering the significant financial challenges presented in the Council’s Revenue Budget be noted.

(2)  That action be taken to minimise the impact on the Council’s medium term financial position.