Issue - meetings

To consider recommendations from Cabinet arising from the November 2016 Financial Monitoring Report and Mid-Year Treasury Review in respect of the Capital Programme and Prudential Indicators.

Resolved:-  (1)  That the following schemes be included in the 2016/17 Capital Programme (paragraphs 2.13):-

·             Capitalisation of Building Repair and Maintenance Costs - £157,00

·             Capitalisation of costs relating to Pit House West - £85,000

·             Capitalisation of Grass Cutter - Rother Valley Country Park - £35,000

(2)  That changes to budgets identified in Appendix 3 for projects which are already included in the Approved Capital Programme be approved.

(3)  That the position in respect of the Mid-Year Treasury Review be noted and the changes to the 2016/17 prudential indicators be approved.

Councillor Reeder expressed her concern about Clifton Community School’s conversion to a sponsored academy and the £1.2 m deficit balance falling on the Council.

Mover:-  Councillor Alam                        Seconder:-  Councillor Read

Report of the Strategic Director of Finance and Customer Services

Cabinet Member:     Councillor Alam

Commissioner:         Myers (in advisory role)

Recommendations:-

That Cabinet:

·           Notes the current 2016/17 forecast overspend of £1.775m, after management actions and the allocation of additional in year budget. (Paragraph 3.1)

·           Notes and endorses the specific actions being implemented to challenge planned spend between now and the end of March to reduce the forecast overspend and minimise the call on reserves. (Paragraph 2.7)

·           Recommend any additional actions which could be implemented to help manage down the current forecast overspend.

·           Notes that a detailed Dedicated Schools Grant (DSG) High Needs Sufficiency Strategy and Financial Plan to address funding and provision will be discussed and consulted upon at the 13^th January 2017 Schools Forum meeting. (Paragraph 3.16)

·           Recommends to Council the inclusion of the following schemes in the 2016/17 Capital Programme (paragraphs 2.13):

o    Capitalisation of Building Repair and Maintenance Costs - £157,000

o    Capitalisation of costs relating to Pit House West - £85,000

o    Capitalisation of Grass Cutter - Rother Valley Country Park - £35,000

·           Recommends to Council the approval of changes to budgets identified in Appendix 3 for projects which are already included in the Approved Capital Programme.

·           Notes the position in respect of the Mid-Year Treasury Review and recommends that Council approves the changes to the 2016/17 prudential indicators.

Consideration was given to the latest report which set out the financial position for both the Revenue Budget and the Capital Programme at the end of November and was based on actual costs and income for the first eight months of the financial year and forecast costs and income for the remaining four months of 2016/17.

The revenue position, before adjusting for the additional budget allocation approved by Council on 7^th December, showed a forecast overspend of £9.623m after currently identified management actions. The additional in year budget approval had reduced the forecasted overspend down to £1.775m, however, this additional budget approval had to be funded and the extent to which in year revenue spend across the whole Council could not be reduced, would inevitably impact the Council’s reserves and future financial sustainability.

The Council report approved additional in-year funding to address pressures, predominantly in Children’s Services (£7.848m) and £608k for new investments for Adults, Children’s and Corporate Services which would enable the delivery of significant savings in future years. The report also approved additional funding for 2017/18 of £11.005m which would be built into the Medium Term Financial Strategy and specific budget plans for next year.   

There was also a significant forecast overspend (£5.505m) on the Dedicated Schools Grant (DSG) High Needs Block. This was a forecasted increase of £4.5m in an eight month period. Whilst this did not affect the Council’s financial position directly at this time it was imperative that the recovery strategy reported in September Financial Monitoring Report to Cabinet was implemented in order to address this position and avoid any risk to the Council in the future.

The report showed the detailed reasons for forecast revenue under and over spends by Directorate after management actions which have/were already being implemented and which also included extensive controls with monthly budget challenging meetings, the Workforce Management Board which scrutinised all requests for recruitment etc. and was chaired by the Assistant Chief Executive, management of procurement spend and deep dives into unspent budgets.

The Capital Programme was currently on target to deliver within the overall approved budget and the report provided a detailed update and sought support to recommend to Council the inclusion of £277k costs capitalisation in the 2016/17 programme and the re-profiling of some approved budgets to reflect revised timescales for project delivery.

The report also detailed the revisions to the regulatory framework of treasury management during 2009 which introduced a requirement that the Council receive a mid-year treasury review, in addition to the forward looking annual treasury strategy and backward looking annual treasury report required previously.  The review informed on performance against the plan and included key messages on investments, borrowing and governance, which was monitored by the Audit Committee.

The Leader asked for Directorates/Cabinet Members to report on some of the pressures they were facing and the corporate mitigating actions being taken, but similar to other Local Authorities across the country Rotherham was facing overwhelming pressures in Adult Social Care.

The Cabinet  ...  view the full minutes text for item 153