Agenda item

That the report be noted, including the following:

1.         Services forecast a £6.2m revenue budget variance at year end which includes use of £7.4m central government grant, as set out in the Appendix, paragraph 1, of the submitted report.

2.         Services forecast to achieve £64.5m efficiencies and service reductions by year end, as set out in Appendix, paragraph 38, of the submitted report.

3.         The total forecast capital expenditure for 2015/16, including long term investments, is £222.3m, as set out in Appendix, paragraph 46, of the submitted report.

4.       The investment of £3.4m in the East Surrey Local Transformation Investment Fund be approved, subject to final agreement of the proposal by all parties, as set out in Appendix, paragraph 50, of the submitted report, and signed off by the Leader of the Council.

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 can be called in by the Council Overview Board]

The Leader of the Council presented the budget monitoring report for the tenth month of the 2015/16 financial year, covering the period up to 31 January 2016. He said that it was the first budget monitoring report since the Council set its budget for 2016/17 and was important in setting the context for delivering that budget. He also said that the demographic demand pressures continued to grow and the Council needed to find new ways of delivering the services, which was why the Public Value Transformation programme was of great importance.

He went on to say that, at the start of this month, the Government’s Final Settlement provided County Councils, such as Surrey, with some Transitional Relief in the face of the most severe cut in government funding that Council’s had witnessed and stressed the importance of working together as one team to get the Council’s concerns listened to. The Secretary of State had gone further by announcing a review of the relative needs assessment, which would be the Council’s opportunity to make the case for a fairer distribution system that would reflect the demographic pressures faced by this Council.

As he stated as each Cabinet meeting, the Council’s financial strategy had four key drivers to ensure sound governance in managing finances and providing value for money.

These were:

1.  To keep any additional call on the council taxpayer to a minimum

The current forecast end of year revenue position was for an underspending of £6.2m and he said that managing budgets and overall resources to achieve an underspending this year was vital for giving some headroom and flexibility for managing the Council’s future spending plans and therefore, he was confident that Cabinet’s support for managers’ actions would make this the sixth consecutive year that the Council would have a small underspend or balanced outturn across the Council.

However, within both Adults and Children’s Social Care demand was rising and this was putting pressure on both of these budgets. Adult Social Care faced a small overspending, but this included £8.0m one off support, which if left unchecked would add to pressures in future years.

He said that some of the underspending was due to services being unlikely to incur committed expenditure before 31 March 2016 and that the Cabinet would look carefully at any requests for carry forwards at the year end to ensure that services could meet their commitments, and that the Council overall had sufficient financial headroom for next year’s budget.

2.  To continuously drive the efficiency agenda

At the end of December, services forecast delivering £64.5m efficiencies and of this, nearly £38m had either already been implemented or were on track, £6m had some issues and there were £20m additional in year or one off savings. Only £0.5m were considered to be at risk.

3.  To reduce the Council’s reliance on council tax and government grant income.

That reducing reliance on government grants and council tax was key to balancing the Council’s budgets over the longer term and that the Revolving Infrastructure & Investment Fund was part of this strategy and forecast investing £62m this year.

4.  To continue to maximise our investment in Surrey   

Finally, he said that he considered that the Council’s £696m capital programme for 2015-20, improved and maintained services, invested in Surrey and generated income for the council.

Other Cabinet Members were invited to highlight the key points and issues from their portfolios, as set out in the Annex to this report.

RESOLVED:

That the report be noted, including the following:

1.         Services forecast a £6.2m revenue budget variance at year end which includes use of £7.4m central government grant, as set out in the Appendix, paragraph 1, of the submitted report.

2.         Services forecast to achieve £64.5m efficiencies and service reductions by year end, as set out in Appendix, paragraph 38, of the submitted report.

3.         The total forecast capital expenditure for 2015/16, including long term investments, is £222.3m, as set out in Appendix, paragraph 46, of the submitted report.

4.       The investment of £3.4m in the East Surrey Local Transformation Investment Fund be approved, subject to final agreement of the proposal by all parties, as set out in Appendix, paragraph 50, of the submitted report, and signed off by the Leader of the Council.

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.