Issue - meetings

Pete Hudson, Chief Finance Manager, presented the submitted report 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.

Details were provided of progress on the delivery of the Revenue Budget for 2011/12 based on performance for the first nine months of the 2011/12 financial year. It was currently forecasted that the Council would overspend against its Budget by £3.066m (+1.4%). This showed a decrease in the forecast overspend of £4.271m compared to the budget monitoring report for the first eight 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;

·              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 target of £1.45m and slippage in delivering the savings target for Shared Services (£500k).

In arriving at the revised forecast overspend of £3.066 m, the above pressures were mitigated through the proposed closure of some reserves, additional income, use of contingency and in-year slippage against the Riverside House budget.

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. 

Members asked a number of questions which were answered.

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 further actions be taken by Directorates so as to minimise the impact on the Council’s medium term financial position.

(3) That the use, and where appropriate closure of the reserves included in Appendix 2, to mitigate the forecast overspend, be noted.

-        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 served, 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 £3.066m (+1.4%). This showed a decrease in the forecast overspend of £4.271m compared to the budget monitoring report for the first eight 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

·              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 and slippage in delivering the savings target for Shared Services (£500,000).

In arriving at the revised forecast overspend of £3.066m, the above pressures were mitigated through the proposed closure of some reserves, additional income and use of contingency and in-year slippage against Riverside House budget.

The following savings and income sources mitigated the forecast pressures by £3.801m:-

Additional NHS funding                                               £0.750m

Waste PFI capitalisation                                            £0.260m

Riverside House (in-year slippage against budget)    £1.091m

Use of Council Contingency                                        £0.600m

Proposed closure and use of some reserves           £1.100m

                                                                                    £3.801m

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.

(3)  That the use and, where appropriate, closure of the reserves included in Appendix 2 to mitigate the forecast overspend be approved.