Agenda item

RESOLVED:

That the report be noted, including the following:

1.       Early forecast revenue budget outturn for 2017/18, ahead of identifying

mitigating actions, was £24m overspend, as detailed in Annex, paragraph 1 of the submitted report. This includes: £9m savings to be identified, £7m savings considered unachievable, and £11m service pressures.

2.       Forecast savings for 2017/18 total were £88.5m against £104.0m target, as set out in the Annex, paragraph 28 of the submitted report.

3.       The Section 151 Officer’s commentary and the Monitoring Officer’s Legal

Implications commentary, as set out in paragraphs 15 to 18 of the submitted report.

4.       That the following revenue budget virements, as detailed in the Annex, paragraph 27 of the submitted report be approved:

· £6.9m from Central Income & Expenditure to Budget Equalisation Reserve;

and

· £0.12m from Budget Equalisation Reserve for sums carried forward to

support corporate apprenticeships.

5. That the following capital budget carry forward, funding adjustment and re-profile requests be approved:

· £45.9m net movement on the Property service capital budget comprising

£10.0m carried forward from 2016/17 and £55.9m rescheduled from 2017/18

to the remaining years of the capital programme, as set out in the Annex, paragraph 45) of the submitted report.

· £1.0m net movement on the Information Technology and Digital capital

budget, comprising £0.9m carried forward from 2016/17 and £0.1m brought

forward from the remaining years of the capital programme, as set out in the Annex,

paragraph 46 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 can be called in by the Overview and Budget Select Committee]

The Leader of the Council presented the budget monitoring report for the third month of the 2017/18 financial year, covering the period up to 30 June 2017. 

He explained that in February the council had 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 the ability to raise funds locally. To balance 2017/18’s budget the council had to make plans to deliver unprecedented £104m savings. This challenge came on top of making over £494m savings since 2009.

He said that after three months of the new financial year, services have already achieved over £38m of savings with another £30m on track for delivery. While this early progress was good, £6m savings were considered at serious risk and £7m of savings were considered to be unachievable in 2017/18 (including nearly £3m each in Early Help and Waste Disposal, plus £1m due to delays in Fire & Rescue Service savings). Whilst £9m of savings had yet to be identified fully, Cabinet Team and Senior Management had held discussions which were progressing.

He also explained that in setting the 2017/18 budget, the council faced significant demand and cost pressures, mostly in social care.  The first three months of this financial year had seen pressures intensify above what was expected even a short time ago.   For example, in Children’s Services, increasing demand was adding a further £9m pressure. In Public Health, retendering of a major contract was adding £2m pressure.

He said that whilst there were some offsetting forecast underspends, such as in Schools and SEND, at this early stage of the financial year and before the council has identified mitigating actions, the combined impact of the lower savings and rising demand was £24m forecast overspend for 2017/18.

He stated that the report showed there was some way to go before a sustainable medium term financial plan was achieved. There were many reasons for the need to restore the financial position and as pointed out by the Section 151 and Monitoring Officers, was the requirement of the Local Government Finance Act to ensure our spending does not exceed our resources.  Given the gravity of this forecast position, it was vital that members and officers continue to identify and implement ways to mitigate the impact of savings shortfalls and service pressures. The council needed 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 financial sustainability.

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

The resolution was unanimous.

RESOLVED:

That the report be noted, including the following:

1.    Early forecast revenue budget outturn for 2017/18, ahead of identifying mitigating actions, was £24m overspend, as detailed in Annex, paragraph 1 of the submitted report. This includes: £9m savings to be identified, £7m savings considered unachievable, and £11m service pressures.

2.    Forecast savings for 2017/18 total were £88.5m against £104.0m target, as set out in the Annex, paragraph 28 of the submitted report.

3.    The Section 151 Officer’s commentary and the Monitoring Officer’s Legal

Implications commentary, as set out in paragraphs 15 to 18 of the submitted report.

4.    That the following revenue budget virements, as detailed in the Annex, paragraph 27 of the submitted report be approved:

·         £6.9m from Central Income & Expenditure to Budget Equalisation Reserve;

and

·         £0.12m from Budget Equalisation Reserve for sums carried forward to

support corporate apprenticeships.

5.    That the following capital budget carry forward, funding adjustment and re-profile requests be approved:

·         £45.9m net movement on the Property service capital budget comprising

£10.0m carried forward from 2016/17 and £55.9m rescheduled from 2017/18 to the remaining years of the capital programme, as set out in the Annex, paragraph 45) of the submitted report.

·         £1.0m net movement on the Information Technology and Digital capital

budget, comprising £0.9m carried forward from 2016/17 and £0.1m brought forward from the remaining years of the capital programme, as set out in the Annex, paragraph 46 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.