Agenda item

Report from the Strategic Director of Finance and Customer Services.

Recommendations:

That Cabinet:

1.    Note the current General Fund Revenue Budget forecast overspend of £5.3m.

2.    Note that actions will continue to be taken to reduce the overspend position but that it is possible that the Council will need to draw on its reserves to balance the 2024/25 financial position.

3.    Note the updated position of the Capital Programme, including proposed capital programme variations to expenditure profiles and funding.

4.    Approve the adoption of the Department for Education’s procedure to help local authorities financially assess Special Guardians as part of the process for setting up Special Guardianship Orders.

5.    Approve the proposed debt write off detailed at 2.44

Consideration was given to the report which stated that the Council currently estimated an overspend of £5.3m for the financial year 2024/25. This was largely due to demand led pressures on children’s residential placements, adults social care packages, home to school transport and the expected impact of the Local Government Pay Award. In addition, the Council was still impacted by the inflationary pressures in the economy. Even though inflation had fallen to 1.7%, the Council’s base costs had significantly increased across the recent high inflation period by well in excess of 20%. Increased costs across this period were also being felt by the social care market in particular, leading to market prices increasing at above inflation levels and placing further pressures on the Council’s Budget.

It was noted that a number of the Capital Programme’s had been completed sooner than expected which was positive news. 

Reference was made to the Adoption of the Department for Education’s model for calculating kinship allowances for Special Guardianship Orders (SGO’s) as set out in paragraphs 2.42 and 2.43 of the report. The Council had decided several years ago to calculate SGO payments according to a bespoke RMBC payment model, using a locally devised formula for the calculation of kinship allowances. The DfE had since produced a calculation form to help local authorities financially assess Special Guardians. It was known as the standardised means test model and when issued was not a statutory requirement for local authorities, though was to be used as a guide. Most Local Authorities had adopted this model, though the Council had continued to use its own model. However, recent legal challenges and best practice suggested that the means test should be undertaken using the Government’s recommended allowance calculator for SGOs, Child Adoption Orders (CAOs) and Adoption. This would result in the payment of higher levels of allowance. The estimated financial impact of the Council adopting this approach was £560k per annum, the impact of which for 2024/25 (£140k) was already factored into the CYPS forecast position. It was proposed that the Council adopted this approach from January 2025.

It was also proposed that the Council write off a debtor balance in relation to IIiad (Rotherham) Ltd, to the value of £466,360.22, dating back from March 2013 as set out in paragraphs 2.44 and 2.45 of the report. The Council had pursued the debt through a variety of channels over a significant period of time. However, it was believed that all avenues had been exhausted and the debt should be written off. The Council had used the normal debt collection routes to no avail and had sought external legal support through its contract with Greenhalgh Kerr, who lodged a case with the liquidator but had informed the Council that it was unlikely to ever see any return from this process. The Council would continue to monitor the case with the liquidator but given the unlikely ability to recover the debt it was proposed to write off the debt. 





Resolved:

That Cabinet:

1.    Note the current General Fund Revenue Budget forecast overspend of £5.3m.

2.    Note that actions will continue to be taken to reduce the overspend position but that it is possible that the Council will need to draw on its reserves to balance the 2024/25 financial position.

3.    Note the updated position of the Capital Programme, including proposed capital programme variations to expenditure profiles and funding.

4.    Approve the adoption of the Department for Education’s procedure to help local authorities financially assess Special Guardians as part of the process for setting up Special Guardianship Orders.

5.    Approve the proposed debt write off detailed at 2.44.