Agenda item

Revenue Budget Monitoring 2014/15


Further to Minute No. 24 of the meeting of the Cabinet held on 6th August, 2014, consideration was given to a report presented by Stuart Booth, Director of Financial Services, which provided details of progress on the delivery of the Revenue Budget for 2014/15 based on performance for the first three months of the financial year.  It was currently forecast that the Council would overspend against its Budget by £6.752M (+3.2%). 


When the 2014/15 Budget was set, there had been recognition that there was the potential for this to be a challenging year with the need to manage service demands very closely and that the level of balances reflected this potential increase in financial risk in the system.   


The main reasons for the forecast overspend were:-


·           The continuing service demand and cost pressures for safeguarding vulnerable children across the Borough.

·           Cost pressures arising from some schools converting to academies.

·           Income pressures within Environment and Development Services and ICT.

·           Demand pressures for Direct Payments within Older People and Physical and Sensory Disability clients.

·           Additional, property costs from the continued rationalisation of the Council’s buildings as part of the efficiency drive to reduce operational costs.

·           Some savings targets were currently pending delivery in full in 2014/15.


Cabinet had agreed the implementation of the opportunity for staff to apply for Voluntary Severance/Voluntary Early Retirement and where this could be supported these savings would help to reduce the in-year financial pressure and also contribute to closing the budget funding gap for 2015/16 and beyond.


As the current forecast outturn was significantly different to budget, Cabinet was asked to support the implementation of the same successful three stage strategy (Section 7.4 of this report) used in 2013/14 to bring spend in line with budget by the end of 2014/15.


The above actions would mitigate the current level of forecast overspend and assist the  Council to deliver a balanced outturn and preserve its successful track record in managing both its in year financial performance and its overall financial resilience.


The Select Commission was advised of the forecasted over and underspends for each which were set out in detail as part of the report.


A discussion and answer session ensued and the following issues were raised and subsequently clarified:-


·         What, if any, financial measures had the Council put in place following publication of the Jay report?  Provision needed to be made in relation to implementing the recommendations, providing support for victims and potential claims: -  

o   The Local Authority was preparing a response to the potential challenges and the Audit Committee would also have a role in this to ensure good financial management;

o   The Leader had identified £120,000 to provide therapeutic services to victims of child sexual exploitation.  This had been funded within existing resources and did not represent a budget pressure;

o   The Jay report emphasised the multi-agency nature of the workforce.  It followed that there would be a multi-agency financial response; 

o   The Self-Regulation Select Committee welcomed the Chief Executive providing further information about regarding a detailed costing of the response to the Jay report.


·         What period did the Local Authority’s Medium Term Financial plans cover, three or five years? : -

o   The Local Authority’s MTF represented a sustainable and resilient five-year plan regarding the vast majority of the Council’s funding via revenue grant.  It should be remembered that the General Election likely to be held in 2015 could bring a change in national financial policy.  The MTF was projecting on-going cuts until 2018/2019.


·         Given the forecast over-spend and the requirement to make in-year savings, consideration should be given to immediately going to Stage Three of the Council’s strategy to address over-spend; 


·         Has the Council / Local Authority given any consideration to registering concerns about the inherent risks to the community following the cuts?


·         More frequent monitoring was requested for future updates relating to over-time and agency and consultancy expenditure: -

o   It was important that the different areas of the budget were given proportional consideration.


·         Was any work being done on looking at ways to retain staff within the City Region to ensure that skills were retained in the local economy: -

o   This would be a future item on the Self-Regulation Select Commission’s work programme;

o   Shared Services were in place between Rotherham and Doncaster Local Authorities and Rotherham and Sheffield Local Authorities.  Market testing for shared services beyond the City Region had taken place but had not progressed further.


·         Were any budgets being treated differently when it came to re-alignment and over-spending, and was there a role for the Self-Regulation Select Commission in this analysis?


·         The winter pressures budget had spent more over the relatively ambient 2013/2014 winter. 


Resolved:-  (1)  That the current forecast outturn and significant financial challenge presented for the Council to deliver a balanced revenue budget for 2014/15 be noted.


(2)  That the three Stage Strategy to address the forecast overspend as detailed in this report, to bring spend in line with budget by 31st March 2015 be noted.


(3)  That Members of Parliament be notified of concerns relating to budget pressures falling on the Council as a result of some Academy Conversions and implementing the requirements of the Care Bill.


(4)  That concerns be passed to relevant bodies regarding the increasing, sustained risk that austerity measures were posing to communities. 


(5) That the Self-Regulation Select Commission requests that agency/consultancy costs be included in the revenue budget reports to this committee.

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