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 of £5.8m.

2.    That Cabinet note that management actions continue to be developed and implemented to address areas of overspend and to identify alternative and additional savings to mitigate shortfalls in achieving planned savings in 2018/19.

3.    That Cabinet note that the Capital Programme positon and Treasury Management key indicators for the first quarter of 2018/19 will be reported in the Financial Monitoring Report to Cabinet in September.

4.    That Cabinet agree the changes to the Business Rates Revaluation Support Scheme as set out in paragraphs 3.11.1 to 3.11.3 of this report and that any further changes which may be required are delegated to the Strategic Director - Finance and Customer Services in consultation with the Cabinet Member for Corporate Services and Finance.

5.    That Cabinet approve the virement of budget within Children’s and Young Peoples Services of £500k to Special Guardianship Orders from the placements budget, as referenced in paragraphs 3.2.8 to 3.2.14 of this report.

Consideration was given to the report which set out the financial position for the Revenue and Capital Budgets at the end of May, 2018 based on actual costs and income and forecasts for the remainder of the financial year. This was the first of a series of monitoring reports for the 2018/19 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 May 2018 the Council had a net forecast year-end overspend of £5.8M on the General Fund, after taking account of the £10M budget contingency approved within the 2018/19 budget and the actions currently underway to address budget pressures, particularly in Children and Adult’s Social Care

Children and Young People’s Services continued to overspend against budget in 2018/19.  The number of children in care was still increasing, 23.3% since May 2017 (from 509 to 628).  This was exacerbated by the number of high cost placements that had arisen from a combination of complex child protection cases and Operation Stovewood. This 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 £1.010M.

Management activity was underway to identify areas of overspend and put mitigating measures in place whilst maintaining service delivery.  The overall budget position would continue to be closely monitored with provision of regular updates through the financial monitoring reports.

Within the 2018/19 budget, new savings of £15.2M were required to achieve a balanced budget.  This was in addition to £6.5M of savings that were approved in prior years for delivery in 2018/19 making a total savings requirement of £21.7M.  Progress in delivery of the savings was reflected in the forecast overspends and supporting narratives of the Directorates.  Currently all savings were either on track or mitigating actions in place with the exception of savings in Adult Social Care and a small amount in Children and Young People’s Directorate. 

The forecast overspend should be set against a backdrop of the Council having successfully addressed cost pressures of £162M between 2011/12 to 2017/18, the requirements to save a further £21.7M in the current year and to deliver a further £30M of efficiencies and savings in the following two financial years in order to meet the estimated budget gaps to 2020/21.

Rotherham’s schemes for Supporting Small Businesses and Support for Pubs based on Government guidance for those schemes had been agreed. However, the Government did not provide any detailed guidance for Revaluation Support but gave each Council a fixed amount of grant to be distributed to businesses based on locally developed criteria. Rotherham Council have received £365k for 2017/18 and Cabinet agreed Rotherham’s criteria for distributing the grant in November, 2017.

Any grant which was not distributed to businesses would be clawed back by the Government and following reviews of grant applications against the original criteria, which indicated less than expected take-up of the grant, revised criteria.

A balance of grant still remained available for award.  Businesses were being contacted to make them aware that the grant was available and the Council was confident all of the funding would be used.

The Deputy Leader referred to the unprecedented growth in the number of looked after children which had seen a further rise and compounded by the increasing complexity of children admitted into care.  The number of “Special Guardianship Orders” was also rising, but whilst there was a cost associated with this, the outcome was positive with permanency being provided within a family setting.  Officers would continue to work closely to bring the overspends under control.

The Cabinet Member for Waste, Roads and Community Safety pointed out whilst there was a net forecast year-end overspend this echoed the national picture that many Councils were facing.  It was important to highlight that the Council would endeavour to ensure the most vulnerable were protected, but would have less resources moving forward.

It was also pointed out that there was a £150k pressure on Licensing due to additional legal costs and fees.

The Cabinet Member for Adult Social Care and Health confirmed social care funding was of concern, but recognised the increasing pressures against the delivery of savings.

The Council would continue to face increasing pressures with over a third of its budget lost through savings, but would continue to have further implications for financial years 2019/20 and 2020/21 where the Medium Term Financial Strategy identified a further £30M as being required to balance the budget.

Resolved:-  (1)   That the current General Fund Revenue budget forecast overspend of £5.8M 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 2018/19.

(3) That the Capital Programme position and Treasury Management key indicators for the first quarter of 2018/19 be included within the financial monitoring report to be submitted in September, 2018.

(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 and that any further changes which may be required be delegated to the Strategic Director, Finance and Customer Services in consultation with the Cabinet Member for Corporate Services and Finance.

(5)  That the virement of budget within Children and Young People’s Services of £500k to Special Guardianship Orders from the placements budget, as referenced in paragraphs 3.2.8 to 3.2.14 of the report, be approved.