Agenda item

Report of the Strategic Director of Finance and Customer Services

Cabinet Member:     Councillor Alam

Commissioner:         Ney (in advisory role)

Recommendations:

1.    That the current forecast overspend for 2017/18 of £4.012m be noted. 

2.    That it be noted 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 2017/18 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 current forecast outturn position on the approved Capital Programme for 2017/18 and 2018-2022 and the proposed re-profiling of expenditure be noted.

Consideration was given to the report which set out the financial position for the Revenue and Capital Budgets at the end of September, 2017 based on actual costs and income for the first six months of 2017/18 and forecasts for the remainder of the financial year. This was the third of a series of monitoring reports for the 2017/18 financial year which would continue to be brought forward to Cabinet and Commissioners on a regular basis. 

Delivery of the Council’s Revenue and Capital Budget and Medium Term Financial Strategy within the parameters agreed at the start of the current financial year was essential if the Council’s objectives were to be achieved.  Financial performance was a key element within the assessment of the Council’s overall performance framework.

As at September 2017 the Council had a forecast overspend on the General Fund of £4.0m, an increase of £0.6m over the £3.4m as at July.  The main reason for this increase was a continuing rise in the projected overspend by the Children and Young People’s Directorate of £0.961m, chiefly attributable to continued increases in the number of children in care.

Offsetting this increased overspending, the Adult Care and Housing forecast overspend had reduced from £5.142m to £5.066m.

As reported for July, Central Services was still predicted to deliver some £5m in savings the product of a review of Business Rates and Treasury Management. 

Management actions to address areas of overspend were also ongoing and the overall budget position would continue to be monitored closely.  Overall, however, monitoring showed that the Council’s Revenue Budget position had deteriorated by £0.6m since July and to the extent that expenditure could not be contained within budgets by management actions or by identifying additional savings, the Council would need to call on its reserves in order to balance the revenue budget for 2017/18.  

In light of this, all services would, therefore, continue to develop mitigating actions and alternative savings to compensate for financial pressures and delays in delivering the full amount of savings. The financial effects of the mitigating actions that have been identified and implemented to date were reflected in the current forecast outturn.  Regular updates on the progress made in maintaining a balanced budget position would be reported regularly through these Financial Monitoring reports . 

A significant in-year pressure on the Dedicated Schools Grant (DSG) High Needs Block remained – the projected overspend having increased by £760k from July to the current projection of £7.220m.  Whilst this pressure did not directly affect the Council’s financial position at this time it was imperative that the recovery strategy was implemented, clearly setting out how this position would be resolved and to avoid any risk to the Council in the future. This included the planned transfer of £3m DSG in 2017/18 to reduce the forecast High Needs Block deficit.

The service had developed a recovery plan which aimed to mitigate as far as possible the in-year pressure and achieve the previously reported position of an overall cumulative deficit of £1.796m by April, 2019. 

The 2017/18 Capital Programme was currently forecasting an in-year underspend of £6.676m – a change of £7.7m from the over-commitment reported in the first 2017/18 monitoring report in July. 

The majority of the forecast underspend had been re-profiled into 2018/19  This revised and re-profiled Capital Programme would continue to be closely monitored and any further revisions and adjustments to the Programme included within the next monitoring report for Cabinet approval.

Councillor Watson, Deputy Leader, reported on the pressure facing Children’s Services, the number of children being brought into care, which was a reduction on last year’s numbers due to additional funding, and the potential for these numbers to increase.

In terms of the Dedicated Schools Grant a recovery plan had been developed which aimed to mitigate as far as possible the in-year pressures.

Councillor Roche, Cabinet Member for Adult Social Care and Health, reported on the forecasted overspend and the measures being taken to bring this down.  This was an issue nationally and only three Local Authorities last year had kept within budget for Adult Social Care.

The Leader, in response to a question raised about the issues facing Local Government and future funding, confirmed that a number of professional organisations were lobbying Central Government and making representations to the Treasury.

The level of cuts since 2010 had removed £200 million from Council budgets and this was having a huge impact on the services being provided and on the workforce numbers.

Resolved:-  (1)   That the current forecast overspend for 2017/18 of £4.012m be noted. 

(2)  That the management actions that continue to be developed to address areas of overspend be noted and alternative and additional savings be identified to mitigate shortfalls in achieving planned savings in 2017/18.

(3) That the detailed Dedicated Schools Grant (DSG) Recovery Strategy be noted which would transfer £3m in 2017/18 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 current forecast outturn position on the approved Capital Programme for 2017/18 and 2018-2022 and the proposed re-profiling of expenditure be noted.