Councillor Alam, Cabinet Member Corporate Services and Budgeting, introduced the July financial monitoring report 2016/17.
The report set out the financial position as at the end of July, 2016, and was based on actual costs and income for the first 4 months of the financial year and forecast costs and income for the remaining 8 months of 2016/17.
The current position showed a forecast revenue overspend of £8.272M after currently identified management actions totalling £4.664M.
The forecast overspend was set against a backdrop of the Council successfully delivering savings of £117M over the last 5 years and having to save a further £21M in 2016/17. The majority of the savings in 2016/17 were being achieved and the position also assumed that the savings from the review of staff terms and conditions of employment agreed at the 2nd March Council meeting for 2016/17 (£2M full year effect) would be delivered.
The key pressures contributing to the current forecast overspend were:-
- The continuing service demand and agency staffing cost pressures for safeguarding vulnerable children across the Borough and the strengthening of Social Work and management capacity
- Demand pressures for Direct Payments and Managed Accounts, Residential and Domiciliary Care across all Adult client groups
The report also drew attention to the significant forecast overspend on the Dedicated Schools Grant High Needs Block (£3.9M) and the need to reduce the Council’s net spending by over £40M over the next 3 years with at least £13M falling in the 2017/18 financial year.
Discussion ensued with the following issues raised/highlighted:-
· Concern regarding investing in CYPS at the same time as cutting services. There needed to be a thorough review of how the money was being spent and where the wastage was i.e. use of agency staff e waste is.
· The issues of Direct Payments and Complex Needs were sensitive subjects as they were services of direct impact on people’s lives. From a Council’s budget perspective it was believed that the areas of identified overspending could be addressed in terms, in terms of spend, through improved practice and process; it was not about the direct impact on the individuals
· Was the Authority’s performance on Direct Payments in alignment with that nationally? Rotherham had some specific issues and problems in relation to Direct Payments. The new Strategic Director Adult Social Services was undertaking work on this issue
· Was the Authority on target to meet 2015/16 cuts when it was anticipating a £8M overspend? How do we monitor these targets? The actual savings that were provided by the Council in March were in the main on track to be delivered apart form a small number. The areas of overspend were not related to areas of savings but to other aspects within Service areas and which required to be the focus of attention. The November report to Cabinet would set out the proposed way forward
· In terms of the overspend in areas such as CYPS was that a result of general poor budgeting or was it the poor performance of officers in relation to them not managing their budget? It was not appropriate to comment on individual officers. The Service had been given additional funding for the current year as well as a similar amount within the financial last year but was still overspent. It was £7-8M overspent in 2015/16 and running at a similar level currently. It was fair to say that the budget was not set at a level high enough to take account of spend and would have to answer for that. There was a difficulty in recruiting Social Workers which the Authority needed and having to pay for agency staff. Work was ongoing with the Cabinet and officers in terms of understanding what the Authority had to spend opposed to what it wanted to spend
· If the overspend was needed reserves would looked at to deal with it but at what would the Capital Budget come under pressure in order to alleviate the problem rather than reserves? In terms of how the Authority managed the budget pressure and the overall position with regard to the overspend etc. the reserves were an obvious route but that could not happen in perpetuity. Use of the reserves had to be in a planned and managed way that was understood and sustainable and not a short term fix without a plan behind it. All options were being considered to fund and looking to the longer term future. It was possible that the Capital Budget would come under pressure. An assessment was to be undertaken of any options where the Authority could further capitalise any revenue spend and any other options/flexibilities in terms of Legislation and Regulations on the use of Capital resources because there was some scope within the Capital budget
· Should attention be focussed on Services that the Council could provide to generate income? As a Council it could do more and the possibility would be explored
· Had an Impact Assessment taken place on the proposed closure of the toilets in All Saints Square? The work was in progress and would be submitted to the next Cabinet meeting
· Was the Council still in the “dive” or beginning to round out in relation to the overspend? The Council was not there yet in terms of sorting out areas of overspend. In Adult Social Care it was known where the problems were and work was taking place to pull it back but there was demand pressure. In terms of CYPS, it was very complex and sensitive and it was not thought that the level of spend could be pulled back at the current time
Resolved:- That the report be noted.