Agenda item

RESOLVED:

That the report be noted, including the following:      

1.         That the forecast revenue budget outturn for 2016/17 was a £3.5m underspend, an improvement from £1.1m overspend last month, as set out in paragraph 1 of the Annex to the submitted report.

2.         That forecast efficiencies and service reductions for 2016/17 were £66.3m, up from £65.1m last month as set out in paragraph 51 of the Annex to the submitted report.

3.         The Section 151 Officer’s commentary and the Monitoring Officer’s legal implications commentary, as detailed in paragraphs 16 to 23 of the covering report.

4.         That the 2016/17 capital budget be reduced by £0.3m in relation to superfast broadband, as set out in paragraph 62 of the Annex to 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 presented the budget monitoring report covering the period up to 31 January 2017.

He began by saying that in September, several significant financial risks crystallised resulting in an unprecedented forecast outturn of a £22.4m overspend for this financial year and that Cabinet had required officers to take effective measures to bring the 2016/17 budget back into balance.   He confirmed that the measures taken over the past four months by the Chief Executive and the Director of Finance, with the support of Strategic Directors, and by Cabinet in avoiding further spending commitments, wherever possible, had resulted in such improvement as to bring the Council’s forecast outturn position to a £3.5m underspend.

However, the measures to bring 2016/17 back into balance included one-off measures and spending delays and did not address the fundamental issue of service overspends, especially in social care.   These service overspends were driven by more people needing services for more complex needs and at increased cost.  This, plus the scale of savings the Council had already achieved, plus the continuing loss of Government funding made the Council’s long term financial resilience a serious challenge.

He said that progress had been made, but there was still some way to go before a sustainable Medium Term Financial Plan was achieved.   He referred to the Section 151 Officer’s and the Monitoring Officer’s commentaries to this budget monitoring report, which stated that it was a requirement of the Local Government Finance Act to ensure that Council spending did not exceed its resources.

He informed Members that cost, demand and funding pressures meant that overspends in Adult Social Care and Children’s Services amounted to £26m and that many of these pressures were preventing the Council from implementing its savings plans and contributed to the £17m shortfall against the £83m savings target for 2016/17.   He said that this underlying overspend would continue into 2017/18 and these service pressures would continue to have a detrimental impact on the Council’s medium term financial position, which was not yet sustainable.

Finally, he said that given the gravity of the situation, it was vital members and officers continued their actions to identify and implement ways to reduce the overspend in 2016/17   and to address the ongoing issues affecting the council’s financial sustainability for 2017/18 and subsequent years. He reiterated that Cabinet and other leading Members should continue to bring the Council’s budget issues to the attention and understanding of Surrey’s MPs.  

Other Cabinet Members were given the opportunity to highlight key points and issues from their portfolios.

RESOLVED:

That the report be noted, including the following:      

1.         That the forecast revenue budget outturn for 2016/17 was a £3.5m underspend, an improvement from £1.1m overspend last month, as set out in paragraph 1 of the Annex to the submitted report.

2.         That forecast efficiencies and service reductions for 2016/17 were £66.3m, up from £65.1m last month as set out in paragraph 51 of the Annex to the submitted report.

3.         The Section 151 Officer’s commentary and the Monitoring Officer’s legal implications commentary, as detailed in paragraphs 16 to 23 of the covering report.

4.         That the 2016/17 capital budget be reduced by £0.3m in relation to superfast broadband, as set out in paragraph 62 of the Annex to 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.