Agenda item

Report of the Strategic Director of Finance and Customer Services

Cabinet Member:     Councillor Alam

Commissioner:         Ney (in advisory role)

Recommendations:

1.    That Cabinet note the current General Fund Revenue Budget forecast overspend for 2017/18 of £992k.

2.    That Cabinet note 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 Cabinet note the current forecast outturn position on the approved Capital Programme for 2017/18.

4.    That Cabinet agree the changes to the Business Rates Revaluation Support Scheme as set out in paragraphs 3.67 to 3.69 of the report.

Consideration was given to the report which set out the financial position for the Revenue and Capital Budgets at the end of December, 2017 based on actual costs and income 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 December 2017 the Council had a net forecast overspend on the General Fund of £992,000.  This comprised a forecast overspend of £9.992m on Directorate/Service budgets mitigated by £9m savings from Central Services budgets and funding.

The forecast overspend on Directorate/Service budgets had increased by £398,000 from the position report to Cabinet in December, 2017.  However, within the net increase was a significant increase of £1.5m in the forecast overspend for Children and Young People which was now forecasting at £5.5m for the year.  The increasing overspend was attributable to the continuing increase in the number of children in care which had increased by 43 (8%) since last reported and had risen by 18.3% since April 2017.

The increase in the number of Looked After Children had also placed significant and unavoidable pressure on Legal Services within the Finance and Customer Services Directorate with a current forecasted overspend for Legal Services of £1.254m, an increase of £113K since the December report.

Management actions to address areas of overspend were also ongoing in an attempt to eradicate the forecast overspend and ensure the delivery of a financial outturn within budget for 2017/18.  If 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 £855k since the December monitoring report to the current projection of £8.075m.  Whilst this pressure did not directly affect the Council’s financial position at this time it was imperative that the recovery strategy was implemented, which was outlined further by the Strategic Director, 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.

A recovery plan intending 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 had been devised. 

The HRA was now forecast to underspend and not require the planned transfer from HRA reserves.  The changed position was mainly the result of delays in capital spending on cluster sites and the strategic acquisitions programme which would now take place in future years which reduced the planed Revenue Contribution to Capital spending in the current financial year.

The 2017/18 Capital Programme was currently forecasting an underspend of £20.12m in the main due to slippage on capital schemes for which the spend would be re-profiled into 2018/19 and subsequent years. 

The Strategic Director for Finance and Customers Services further clarified that, subject to that further review, alongside finalising costs for the year for voluntary redundancies and depending on the actual amount of capital receipts achieved, it was anticipated that total savings of around £9m could contribute to the Council mitigating budget pressures and towards delivery of a balanced financial outturn for 2017/18.

As a result of a detailed review of the profiling of Adults Care and Housing schemes the December report forecast outturn positon for the 2017/18 approved Capital Programme indicated an in-year underspend of £15.4m, which required re-profiling into later financial years. The report set out in detail the revised programme budgets and latest forecasts of outturn expenditure by Directorate programme and an explanation of the changes.

It was proposed that amendments be made to the Revaluation Support Scheme for Rotherham’s Business Rates payers.  This was in light of changes to some Business Rates accounts and new information obtained which affected some businesses’ qualification for relief meant that a substantial amount of the grant allocation would not now be awarded based on the current scheme criteria.  It was proposed that:-

-          The rateable value threshold for businesses to be able to qualify for the relief be increased from £100,000 or less to £300,00 or less

-          The maximum award of relief for a business property be increased from £5,000 to £25,000

Resolved:-  (1)   That the current forecast overspend for 2017/18 of £922k 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 current forecast outturn position on the approved Capital Programme for 2017/18 be noted.

(4)  That the changes to the Business Rates Revaluation Support Scheme, as set out in paragraphs 3.67 to 3.68 of the report, be approved.