Cabinet Portfolio: - Corporate Services, Community Safety and Finance
Strategic Directorate: - Finance and Customer Services
Consideration was given to a report that was submitted for pre-decision scrutiny ahead of the Cabinet meeting scheduled for 24 January 2022 that detailed the Council’s financial position as at the end of November 2021 based on actual cost and income figures for the first eight months of 2021/22. It was noted that the report was the fourth of a series of financial monitoring reports for the current financial year. The Assistant Director - Financial Services and the Head of Corporate Finance attended the meeting to present the report. The Cabinet Member for Corporate Services, Community Safety and Finance was unable to attend the meeting to present the report.
The report stated that as of November 2021 the Council was expecting to deliver the overall outturn within budget for the financial year 2021/22. It was noted that while the Directorates had a current forecast year end overspend of £8.5m on General Fund expenditure that this should be mitigated by the Government’s provision of COVID-19 emergency support grant and Sales, Fees and Charges Income Compensation. It the noted that the longer-term impacts of Covid-19, public health measures and the pace at which services can return to normal was unknown, with this situation being further exacerbated by current uncertainties that had been brought about by the Omicron Covid-19 variant that had the potential to create further financial implications for the Council.
The report provided a detailed narrative for the budget position of each directorate. The report also provided information on the delivery of previously agreed savings, the position of the Housing Revenue Account, the Omicron Hospitality and Leisure Grant and the delivery of the Capital Programme.
Members noted that since the production of the report the Omicron Hospitality and Leisure Grant had now been launched and that applications were now being accepted. Members noted that they hoped as many local businesses as possible who were eligible would apply for the additional support that they were entitled to.
Members sought clarification regarding the projected year end overspend of £8.5m on General Fund expenditure and whether all of the overspend could all be attributed to the impact of the pandemic or whether all or some of the overspend would have happened anyway. The Assistant Director - Financial Services noted that the detailed financial returns that were submitted to the Government in relation to Covid-19 Grants showed that these overspends were greater than the projected deficit, and as such this showed that many services across directorates were in fact underspending on agreed budgets, in the main linked to reprioritising work to deal with Covid for which the grant funding was available. The Head of Corporate Finance noted the budget underspends that directorates had delivered during 2020/21 and how the related savings had been used to increase the Council’s reserves. The Assistant Director confirmed that as many of the Covid-19 support grants that have been provided by the Government had not been ringfenced with regard to how they could be used that any unspent funds could be kept by the Council and used how the Council deemed appropriate. The Assistant Director advised that further information on how the unspent funds from Covid-19 support grants were being proposed to be used would be provided in the forthcoming budget report.
Members sought further information and clarification regarding the scope, application process and deadline for applications regarding the Omicron Hospitality and Leisure Grant. The Head of Corporate Finance confirmed that the Omicron Hospitality and Leisure Grant was a one-off payment and that applications from businesses would need to be received by the Council by 28 February 2022, with all payments having to be made on eligible claims by 21 March 2022. The Head of Corporate Finance noted that the information, as requested by the Government, that that would need to be provided by businesses was unfortunately more extensive than had been the case for previous support grants. It was also noted that a separate scheme was available for businesses to apply for support with their business rates.
Members asked for further information regarding the reducing number of older persons placements and the related costs and whether this was a one off situation or a continuing trend. Members noted the significant amount of funding that was being received by the Council to cascade into the local adult care services market that was due to end in March 2022 and asked what impact the ending of this funding would have on the local market for adult care services. The Assistant Director confirmed that there were some one-off issues relating to the reduction in older persons placements and related Covid-19 funding, with some costs that would normally be the responsibility of the Council currently being covered by NHS funding. The Assistant Director confirmed that further information on this situation would be provided in the forthcoming budget report. The Assistant Director assured members that the budget that was being developed to fund Adult Care services in 2022/23 would be sufficient to deliver all required services and that the ability to deliver services would not be negatively impacted by changes related to how some services were currently funded by the NHS.
Members noted the “invest to save” projects and the related increased spending that had been previously implemented in Children and Young People’s Services and asked whether these projects were being reviewed in order to assess if the extra spending was still required. The Assistant Director advised that as detailed in the Medium-Term Financial Strategy report that had been considered by the Overview and Scrutiny Management Board and by Cabinet in December 2022 that the level of investment in the Service continued to be assessed with an objective of reducing the increased funding where it was no longer required. The Assistant Director noted that Children and Young People’s Services still had further work to do to deliver the required savings and cost reductions on how it provided services and confirmed that further information on this would be provided in the forthcoming budget report.
Members noted their concern regarding the apparent high costs attributed to the employment of agency workers in the Children and Young People’s Services directorate. The Assistant Director assured members that agency spend in that directorate was monitored closely and assured members that this activity and the tight controls that were in place with regard to the employment of agency staff were an integral part of the overall strategy of reducing costs in Children and Young People’s Services.
Members noted the ongoing budget pressures facing Children and Young People’s Services such as the costs related to emergency placements and asked how much of the current pressures being faced were attributable to long-term issues and which pressures were specifically related to responding to the challenges presented by the pandemic. The Assistant Director noted that officers from Children and Young People’s Services would be able to provide a more comprehensive response but advised that the pandemic had some cost impact on placements (£1.5m noted in the report). There has also been a national issue with some delays in the courts system due to how courts have been able to operate during the pandemic, delays which to some extent could impact upon social care systems.
The Chair thanked the Assistant Director - Financial Services and the Head of Corporate Finance for attending the meeting and for answering member questions.
That Cabinet be advised that the recommendations be supported.