Agenda item

Report of the Strategic Director of Finance and Customer Services

Cabinet Member:     Councillor Alam

Commissioner:         Ney (in advisory role)

Recommendations:

That Cabinet:

·         Notes the current forecast overspend for 2017/18 of £6.9m. 

·         Notes that management actions continue to be developed to address areas of overspend and to identify alternative and additional savings to mitigate shortfalls in achieving planned savings in 2017/18.

·         Notes that a detailed Dedicated Schools Grant (DSG) Recovery Strategy which will transfer £3m in 2017/108 to reduce the forecast High Needs Block deficit and mitigate the in-year pressure through a series of measures has been set in place.

·         Notes that the Capital Programme positon and Treasury Management key indicators for the first quarter of 2017/18 will be reported as part of the July monitoring cycle. 

Consideration was given to a report which set out the financial position for the Revenue Budget at the end of May 2017 and was based on actual costs and income for the first two months of 2017/18 and forecast for the remainder of the financial year.

It was reported that, as at May 2017, the Council had a forecast overspend on General Fund of £6.9m. The majority of the £24m budget savings approved within the 2017/18 were being achieved. £11.9m of those savings were Directorate budget savings. However, in addition to those budget savings, Directorates were also required to achieve £5.4m of budget savings in 2017/18, which were agreed in previous budgets. Total Directorate savings for 2017/18 therefore were £17.3m. It was noted that the current position was that around £5.3m of those total savings were at risk of not being achieved in the current financial year (and were reflected in the current overspend projection).

It was further reported that the overall budget position would continue to be monitored closely with regular updates on progress in maintaining a balanced budget position reported regularly through Financial Monitoring reports to Cabinet. The projected outturn position also assumed that the savings of £1.1m for 2017/18 set against staff terms and conditions of employment are met from Directorate staffing budgets. The process for identifying and capturing those savings against workforce budgets was being agreed.

It was noted that the forecast overspend should be set against a backdrop of the Council having successfully addressed cost pressures of £138m over the last six financial years and having to save a further £24m in the current year and to deliver an additional £42m in efficiencies and savings in the following two financial years in order to balance the Council’s General Fund Revenue Budget by 2019/20.

It was further noted that a significant in-year pressure of £4.880m on the Dedicated Schools Grant (DSG) High Needs Block would continue to be an issue. It was anticipated that a recovery strategy set in place last year would resolve £3m of the deficit and mitigate the in-year pressure through a series of measures including: a revised Special School funding model; a review of high cost out of authority education provision with a view to reducing cost and moving children back into Rotherham provision where possible; and a review of inclusion services provided by the Council. Whilst the pressure did not directly affect the Council’s financial position at that time it was considered imperative that the recovery strategy should be implemented in order to address the position and avoid any risk to the Council in the future.

Resolved:-

1.    That the current forecast overspend for 2017/18 of £6.9m be noted.

2.    That management actions continue to be developed to address areas of overspend and to identify alternative and additional savings to mitigate shortfalls in achieving planned savings in 2017/18.

3.    That it be noted that a detailed Dedicated Schools Grant (DSG) Recovery Strategy which will transfer £3m in 2017/108 to reduce the forecast High Needs Block deficit and mitigate the in-year pressure through a series of measures, has been set in place.

4.    That the Capital Programme positon and Treasury Management key indicators for the first quarter of 2017/18 be reported as part of the July monitoring cycle.