Agenda item

Revenue Budget Monitoring for the period ending 31st August 2014

-           Director of Finance to report.


Councillor Hoddinott, Deputy Leader, introduced a report by the Director of Finance which provided details of progress for the first five months of this financial year.  It was currently forecast that the Council would overspend against its Budget by £3.105m (+1.5%). 


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.


Following Cabinet’s approval to provide a window of opportunity for Voluntary Early Retirement/Voluntary Severance (VER/VS) permission had been given for forty-four employees to leave the Council and decisions regarding thirty-four applications were pending. Savings arising from these staff releases were reflected in the forecast outturn position.


Members were asked to note that on 2nd September, 2014 the Chief Executive used his delegated authority (Cabinet Minute No. C24 6th August, 2014) to implement a moratorium on non-essential spend.  This would assist with reducing the forecast overspend.  


There were a small number of historic, recurrent budget pressures across the Council.    Approval was requested within this report for a permanent budget virement (realignment of budget) to address these, which related to:-


·                £700k recurrent ICT income pressure due to the renegotiated prices charged to Schools for the Rotherham Grid for Learning and a number of schools leaving the service (£387k) and recurrent unachievable income targets due to reduced headcount across the Council and reduced customer ICT development spend (£313k). It should be noted that this income pressure exists despite a significant reduction in staff and other related costs within the ICT service over the last 3 years.


·                £97k to address the forecast recurrent income pressure in Parking Services due to the likely impact of the new Tesco store.


·                £437k to address the non-delivery of the corporate commissioning savings target set in previous years. Members should note that current directorate commissioning savings targets are being delivered.


·                £166k to address a previous year’s unrealisable income targets associated with proposed Housing related Customer services developments.   


Additionally, Cabinet was asked to formally approve virement of the uncommitted balance of the Central Services Local Investment Budget (£120k) to provide additional support services for victims, families and those affected by Child Sexual Exploitation as announced by the Leader of the Council.    


Revenue staff savings from the day of industrial action (10th July, 2014) amounted to £86k. Cabinet was asked to support a recommendation that these savings be utilised to reduce staff cost pressures contained within Appendix 1 which were part of the overall forecast Council overspend.   


Continued close management of spend remained essential if the Council was to deliver a balanced outturn and preserve its successful track record in managing both its in year financial performance and its overall financial resilience.


It was also suggested that the continuing service demand and cost pressures for safeguarding vulnerable children across the Borough be considered further by the Self Regulation Select Commission.


Cabinet Members sought clarification on the contribution by Rotherham to the Sheffield City Region and welcomed the opportunity for further scrutiny of the budget, specifically around the demand and cost pressures for vulnerable children.


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


(2)  That the Budget Virements proposed at Section 7.4 of this report be approved.


(3)  That use of the revenue savings from the day of industrial action to contribute to reducing staff cost pressures within the overall forecast Council overspend be approved.


(4)  That the Self Regulation Select Commission consider, as part of their work programme, the continuing service demands and cost pressures for safeguarding vulnerable children across the Borough.

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