Agenda item

Revenue Budget Monitoring for the period ending 31st October 2014


Further to Minute No. 105 of the meeting of the Cabinet held on 17th December, 2014 consideration was given to a report presented by Pete Hudson, Chief Finance Officer, which provided details of progress on the delivery of the Revenue Budget for 2014/15 based on performance for the first seven months of this financial year.  It was currently forecast that the Council would overspend against its Budget by £2.976m (+1.4%); an improvement of £129k since the last report to Cabinet in October (August monitoring report). 


The current forecast outturn excluded the costs of implementing recommendations from the Jay report and the Ofsted Inspection, and the costs which would be borne by the Council in respect of the Corporate Governance Inspection.


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.

·                Continuing Health Care income pressures and demand pressures for Direct

·                Payments within Older People and Physical and Sensory Disability clients.


The moratorium on non-essential spend implemented on 2nd September was noted and would continue until the end of March, 2015. This would assist with reducing the forecast 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.


The costs associated with the report undertaken by Professor Jay amounted to £102,000 in 2014/15. This represented only the cost of enagaging Professor Jay and her external staffing support..


Costs associated with the Corporate Governance and Ofsted Inspections were currently being quantified and would be included in the next monitoring report, which was due to be presented to Cabinet on the 4th February, 2015.


It was hoped that the Council could deliver a balanced budget with the overspends being aligned.  The Council’s revenue reserves would have to fund any additional costs.


Councillor Ellis referred to the costs associated with the inspections and asked for a guestimate, but was informed it was impossible to put a figure on this at this stage as information was still be collated..  The Chief Executive had written to the Secretary of State about the costs to the Council, but had yet to receive a reply.


Councillor Ellis also referred to the Council being responsible for accrued deficits when schools converted to sponsored academies and was informed that Clifton Comprehensive was not included in the Children and Young People’s Services section of the report on Page 13 as the school would not convert to an Academy in 2014/15.


The Deputy Leader pointed out that the predicted overspend of £1 million had been raised with the Strategic Director of Children and Young People’s Services who had given Clifton Comprehensive until the end of January, 2015 to produce a spending plan to  bring spending in line with the level of funding allocated.  Only once the academy conversion took place would the Council be responsible for the deficit.  There was no contingency fund to pick up these costs

The Select Commission noted the request for academy conversions along with child sexual exploitation to be added to the Corporate Risk Register.


Councillor Ellis also referred to Page 15 of the agenda pack and specifically asked for clarification of the £1.440 million which had been budgeted to be used from the Housing Revenue Account reserves and was informed the figure included vacancy management, carry forward from various projects and capital works. 

The Select Commission noted the consultancy spend and suggested this be monitored closely as there was a potential risk for this to increase when expertise within the Council had been lost with staff retiring/leaving.


Councillor Ellis also referred to the cover arrangements and interim appointments within Children and Young People’s Services and was informed, when asking about whether these were cost neutral, that some of the additional costs would feature in the forecasted overspend for this financial year and only one salary cost for the Director of Safeguarding was being paid.  All costs needed to be collated and would be documented in the revenue budget monitoring report to Cabinet, but details would be circulated to the Select Commission for information.


Councillor McNeely noted the numbers of looked after children requiring placements had increased by seven since the start of the financial year and asked if parents were paid to care for their own children and whether the figures included costs the Council was receiving from other Local Authorities’ children’s placements.


The Deputy Leader confirmed that work was ongoing with the Director of Safeguarding, Children and Families to look at the costs of out of authority placements, particularly in light of the Jay Recommendations.


The Chairman suggested that this be included in a piece of work by a sub-group of the Select Commission and sought nominations.



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 a Sub-Group comprising Councillors Currie, McNeely, Reeder and Whelbourn look at various areas of concern, including out of authority placements and the Housing Revenue Account.



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