Agenda item

Cabinet Portfolio:                 Corporate Services and Finance

Strategic Directorate:           Finance and Customer Services

Consideration was given to the report which set out the financial position as at the end of July 2018 and was based on actual costs and income for the four months April to July, 2018 with forecasts for the remaining eight months of the financial year.

This report was part of a series of financial monitoring reports presented to the Cabinet for 2018/19, setting out the projected year-end revenue budget financial position in light of actual costs and income for the first four months of the financial year and included revenue forecasts, details of capital spending and the projected capital outturn position. 

The current revenue position after four months showed a forecast balanced revenue budget after taking account of the £10m budget contingency approved within the 2018/19 budget. Work continued to identify further savings to improve this position further by the financial year end. 

The report set out by Directorate, the summary forecast revenue outturn position after management actions which have already been quantified and implemented and these were highlighted.

However, to achieve this position a number of mitigating savings actions have been required and further spending reductions had to be identified and implemented across all Council services, in order to offset the impact of a range of cost and demand pressures impacting on the Council’s budgets.

The overspending against budget in Children’s and Young People’s Services Directorate was continuing in the current financial year  as a result of demand for services outstripping budget capacity. The number of children in care continued to increase this financial year.

The increased number of Looked after Children also placed significant pressure on Legal Services within the Finance and Customer Services Directorate. The current forecasted overspend for Legal Services was £1.230m. The Finance and Customer Services Directorate overall was forecasting to outturn within budget after putting into place a range of mitigating actions to compensate for the Legal Service forecast overspend. 

The Adult Care Services Directorate were forecasting an overall overspend of £6.221m. A combination of increased client numbers, the rising cost of care packages, and delays in delivery of savings plans have led to pressure on budgets across all client groups.  A recovery plan has been developed to address previously undelivered savings and project plans are currently being finalised with the expectation that further savings will be identified from this activity.

Regeneration and Environment Directorate was forecasting a balanced budget, although it was facing challenges from a combination of declining business from the school meals service and challenges with delivery of budget savings. 

Discussion ensued on the ability to balance the budget and maintain statutory services and whether there was any flexibility within the Capital Programme once funds had been allocated.  It was pointed out the Council had not reached the stage where it could not fulfil its legal responsibilities and that the Capital Programme was continually monitored for areas of slippage and different financial decision making.

Members also referred to the major pressures facing Regeneration and Environment Services and whether the reviews had been concluded and delivered upon. In addition, whether the pressure on Licensing, as a result of the more robust regime, with the additional legal costs and Counsel fees, could have been mitigated against with permanent staff.  Members were advised that recruitment remained ongoing in Legal Services and the locum capacity reviewed regularly.  A partnership arrangement was in place with Sheffield’s in-house Legal Services to assist with child care cases.

The position in Legal Services would be closely monitored and cases profiled to identify any early trends which may impact even further on the overspend.  Indications were that the demand in Children and Young People’s Services was beginning to plateau and balance out.

The situation with regards to traded services for schools was also subject to review as this was linked to potential income.

Since the report had been written a number of savings, particularly in Customer Information and Digital Services were yet to be delivered at the current time, but it was anticipated this would be achieved by the end of the year.

The ability of Legal Services and Children and Young People’s Services to achieve a balanced budget was questioned further by Members and whether the forecasted figures were accurate, especially when savings proposals had been approved and additional pressures had then arisen, thus cancelling each other out.

Members were advised that the figures contained within the report were for Quarter 1 only (three months of information) and whilst known cost pressures could be identified, assessments based on performance allowed forecasts to be projected forwards.  Services were reasonably confident savings could be delivered, more so with achieved and exceeded income targets from areas such as the theatre, museum and parks etc. and holding vacant posts where this could be done without significantly impacting on service delivery.

Members were mindful of judicial review pressures impacting on the Council and the NHS due to the need for services to change and the risks associated with this. 

Reference was also made to the recent application of a parking charge at Rotherham Show and whether there had been any learning as a result.  Members were advised that charges had to be priced sensibly.  There had been several complaints on social media and comments made by the public all of which had been taken on board.  This would feed into the Rotherham Show debrief.  Members of the public appreciated the need for such a charge being implemented in order for the show to be delivered and remain free to access by members of the public.

Members sought clarification on alternative strategies should the income targets not be achieved given the pressures on Regeneration and Environment Services.

It was noted that all controllable spend was being strictly monitored across all Directorates.  Any strands for additional income, such as building consultancy, were being explored for where this could bring some surplus.

Whilst it was noted that the non-filling of vacant posts may be seen as an easier option with smarter working, this did have an impact and placed more strain on existing staff.  Members were advised there was no intention to increase pressure on employees especially where demand was still great like in Corporate Services. A longer term review of efficiencies was to take place in some areas which may result in some being reshaped.

The Workforce Management Board had oversight of all vacant posts being held and whilst there was a need for some priority posts to be filled, by holding posts vacant this enabled some existing staff to develop into other areas.

Members again referred to the implementation of a number of historical savings which had led to cost pressures in Customer Information and Digital Services and the action to resolve some of the savings alongside a review of management and staffing structures.

It was pointed out that the costs pressures in the current year were being reviewed on a month by month basis.  The review of the staffing structures was ongoing and discussions with the Trades Unions was imminent.

Clarification was sought on the recruitment to posts for employees who were on maternity leave and Members were advised that each post was considered on a case by case basis.

It was also confirmed to Members that the financial forecasts had an included assumption amount against claims for CSE and this was reviewed annually.

Resolved:-  (1)  That the forecast General Fund balanced budget position after use of the budget contingency be noted.

(2)  That the management actions continue to address areas of overspend, provide enhanced controls over all spend and to identify alternative and additional savings. 

(3)  That the alternative budget savings proposals for Regeneration and Environment, and Finance and Customer Services as referenced in paragraph 3.4.3 and 3.6.7 as recommended for approval to Cabinet be noted.

(4)  That the updated Capital Programme be noted.

(5)  That financial monitoring in relation to Children and Young People’s Services and Adult Services be submitted to future meetings.