Issue - meetings

RESOLVED:

That the following be noted:   

1.    Forecast revenue budget outturn for 2017/18, is £21m overspend (paragraph 1 of the submitted report). This includes:

£9m savings to be identified,

£12m savings considered unachievable in 2017/18,

£11m service demand pressures

£11m underspends and additional income.

2.    Significant risks to the revenue budget (paragraphs 38 to 42) could add £13m to the forecast overspend:

£4m in Adult Social Care

£8m in Children, Schools & Families and

£1m in Place Development & Waste

3.    Forecast planned savings for 2017/18 total £83m against £95m agreed savings and £104m target (paragraph 43 of the submitted report).

4.    The Section 151 Officer’s commentary and the Monitoring Officer’s Legal Implications commentary in paragraphs 15 to 18 of the main budget monitoring report to Cabinet that the council has a duty to ensure its expenditure does not exceed resources available and move towards a sustainable budget for future years.

5.    Cabinet will receive a recovery plan for consideration in October 2017.

The the following be approved:

6.    £18,000 draw down of Highways & Transport’s capital carry forward from 2016/17 (paragraphs 60 to 62 of the submitted report).

7.    £2.9m amendments to schools’ devolved capital budgets (paragraphs 63 to 66 of the submitted report).

Reasons for decisions

This report is presented to comply with the agreed policy of providing a monthly budget monitoring report to Cabinet for approval and action as necessary.

[The decisions on this item are subject to call in by the Overview and Budget Scrutiny Committee]

The Leader of the Council read out the statement below regarding Cabinet’s monthly budget monitoring report following which each Cabinet Member was asked to provide a brief outline of the budget position for the services within their portfolio.

‘Today I present the budget monitoring report for period five of 2017/18, up to 31 August 2017.

In February this council set its budget for 2017/18 in the face of:  significant rising demand pressures (particularly in social care);   falling Government funding and  continuing restraint on our ability to raise funds locally.   To balance 2017/18’s budget the council had to make plans to deliver an unprecedented £104m.   This challenge comes on top of making over £450m savings since 2010.

Within the £104m savings target, the council has agreed plans for £95m savings, with £9m savings to be identified.   After five months of the financial year, services have already achieved over £46m of savings and another £28m on track for delivery, with £8m facing potential barriers. £12m savings are now thought to be unachievable in this year (including £6m in Adult Social Care, £3m in Early Help and £3m in Waste Disposal).

The council’s 2017/18 budget includes significant demand and cost pressures, mostly in social care. In some services a small change in volume can lead to significantly increased costs.   In the first five months of the year,   demand has increased above what was expected even a short time ago.   In Children’s Services, demand, and the complexity of the demand, continues to increase and is expected to add a £9m pressure by the end of the financial year.   In Public Health, retendering a major contract is forecast to delay planned changes and add a pressure of up to £2m.   Partially offsetting these pressures, there are forecast underspends elsewhere, including in Schools & SEND, Highways & Transport.

The combined impact of delivering lower savings than planned and demand rising faster than anticipated is a forecast overspend of £21m for 2017/18.   This is a £3m improvement on the overspend forecast as at 30 June 2017, reported to Cabinet in July 2017.    However, considerable risks of volatility remain in some key budgets that are outside the council’s control and the forecast year end position could worsen by up to £13m.    This could put the forecast overspend over £30m.

The Local Government Finance Act requires the council to ensure its expenditure (including spending already incurred in year and anticipated to be incurred) does not exceed its available resources.   In response, Cabinet as advised by the Section 151 Officer, is developing a recovery plan to ensure a balanced in-year budget.   Cabinet will consider the recovery plan in its next budget monitoring report in October.

Given the gravity of this forecast position, it is vital members and officers continue their actions to identify and implement ways to mitigate the impact of savings shortfalls and service pressures. The council needs to identify and implement alternative savings and cost reductions quickly to address the ongoing issues affecting the 2017/18 budget and the council’s future  ...  view the full minutes text for item 154