Agenda item

RESOLVED:

That the report be noted, including the following:

1.    That the forecast revenue budget outturn for 2016/17 was +£1.1m overspend, down from +£6.1m last month (Annex, paragraph 1 of the submitted report).

2.    That forecast efficiencies and service reductions for 2016/17 were £65.1m, up from £62.9m last month (Annex, paragraph 48 of the submitted report).

3.    That the quarter end positions for: balance sheet, earmarked reserves, debt and treasury management be noted (Annex, paragraphs App 7 to App 21 of the submitted report).

4.    That the Section 151 Officer’s commentary and the Monitoring Officer’s Legal Implications commentary be noted(paragraphs 16 to 20 of the submitted report). .

5.    That a reduction in the 2016/17 capital budget by £10.7m related to local growth deal programme consolidation be noted (Annex, paragraph 59 and 60 of the submitted report).

6.    That £1.4m highways capital funding and expenditure relating to maintenance and flood risk management between 2016/17 and 2017/18 be re-profiled (Annex, paragraph 61 of the submitted report).

7.    That the 2016/17 capital budget by £0.8m related to re-evaluation of the scheme for a new fire station in Spelthorne be reduced (Annex, paragraph 62 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 decision on this item may be called in by the Council Overview Board]

The Leader of the Council introduced the report by stating that in September, several significant financial risks crystallised resulting in an unprecedented forecast outturn of +£22.4m overspend for this year.   By the end of December, actions to bring this year’s budget back into balance had brought the forecast outturn position down to +£1.1m overspend.  Whilst this was better the budget had still not quite balanced and

many of the measures used to reduce the 2016/17 overspend were spending delays and one off savings.  

He explained that the council’s financial position was under continuous pressure and there remained an £18m shortfall against planned efficiencies and the underlying overspend will continue into 2017/18, which was reflected in the Budget Report being considered.

He went on to say that the Council still had some way to go before it achieved a sustainable medium term financial plan.   There were many reasons why the council needed to keep working to restore the financial position and highlighted the Section 151 Officer’s and the Monitoring Officer’s commentaries to the report which included the requirement of the Local Government Finance Act to ensure council spending does not exceed resources.

He said that cost, demand and funding pressures have meant overspends in Adult Social Care and Children’s Services amounting to £27m.   Many of these pressures were preventing the implementation of savings plans and contributing to the £18m shortfall against our £83m savings target for 2016/17.   These pressures continued to have a substantial and detrimental impact on the council’s medium term financial position, which was not yet sustainable. 

He went on to explain that the Chief Executive and Director of Finance had agreed with service directors to review all spending plans and consider all options for managing service demand more effectively have improved the 2016/17 financial position and needed to continue.

Furthermore, wherever sensible, Cabinet would continue not to agree further spending commitments until they were assured of a balanced budget and had made progress towards a sustainable Medium Term Financial Plan.  Given the gravity of the financial situation, it was vital members and officers continue their actions to identify and implement ways to reduce the overspend in 2016/17 and address the ongoing issues affecting the council’s financial sustainability for 2017/18 and subsequent years.

He concluded that Cabinet and other leading members must continue to bring the Council’s budget issues to the attention and understanding of Surrey’s MPs.  

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

RESOLVED:

That the report be noted, including the following:

1.    That the forecast revenue budget outturn for 2016/17 was +£1.1m overspend, down from +£6.1m last month (Annex, paragraph 1 of the submitted report).

2.    That forecast efficiencies and service reductions for 2016/17 were £65.1m, up from £62.9m last month (Annex, paragraph 48 of the submitted report).

3.    That the quarter end positions for: balance sheet, earmarked reserves, debt and treasury management be noted (Annex, paragraphs App 7 to App 21 of the submitted report).

4.    That the Section 151 Officer’s commentary and the Monitoring Officer’s Legal Implications commentary be noted(paragraphs 16 to 20 of the submitted report). .

5.    That a reduction in the 2016/17 capital budget by £10.7m related to local growth deal programme consolidation be noted (Annex, paragraph 59 and 60 of the submitted report).

6.    That £1.4m highways capital funding and expenditure relating to maintenance and flood risk management between 2016/17 and 2017/18 be re-profiled (Annex, paragraph 61 of the submitted report).

7.    That the 2016/17 capital budget by £0.8m related to re-evaluation of the scheme for a new fire station in Spelthorne be reduced (Annex, paragraph 62 of the submitted report).

8.    Reprofile £1.4m highways capital funding and expenditure relating to maintenance and flood risk management between 2016/17 and 2017/18 (Annex, paragraph 61).

Reduce the 2016/17 capital budget by £0.8m related to re-evaluation of the scheme for a new fire station in Spelthorne (Annex, paragraph 62).

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.