Agenda item

RESOLVED:

1.         That an early forecast revenue budget outturn for 2017/18, ahead of identifying mitigating actions, is a £24m overspend, as set out in the Annex, paragraph 1 to the submitted report. This includes:
£9m savings to be identified,
£7m savings considered unachievable,
£11m service pressures.

2.         That the forecast savings for 2017/18 total £88.4m against £104.0m target be noted, as set out in the Annex, paragraph 31 of the submitted report.

3.         That the Section 151 Officer’s commentary and the Monitoring Officer’s Legal Implications commentary, paragraphs 15 to 18 of the submitted report, be noted.

4.         That the following revenue budget virements be approved:

·      £1m from Early Help to the Multi Agency Safeguarding Hub, as set out in the Annex, paragraph 28 of the submitted report.

·      £3m from Schools and SEND to Children’s Services, as set out in the Annex, paragraph 29 of the submitted report.

·      £14,000 from Budget Equalisation Reserve to Surrey Safeguarding Board, as set out in the Annex, paragraph 30 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 Corporate Services Select Committee]

The Leader of the Council presented the budget monitoring report for period two of 2017/18.

He said that, in February the 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 the Council’s ability to raise funds locally.   Therefore, in order to balance 2017/18’s budget the Council had to make plans to deliver an unprecedented £104m of savings and that this challenge came on top of making over £450m savings since 2010.

He went on to say that after two months into the new financial year, services had already achieved over £30m of savings, with another £38m on track for delivery, which was good news. Adding to this, he said that savings facing potential barriers had fallen from £43m to £14m, with £6m considered at serious risk. However, £7m of savings were now considered to be unachievable in 2017/18 (including nearly £3m each in Early Help and Waste Disposal and £1m due to delays in Fire & Rescue Service savings).   Lastly, whilst £9m of savings had yet to be identified fully, Cabinet team and Senior Management team had held discussions about possibilities and further discussions were on-going.

In setting the 2017/18 budget, he reiterated that this Council faced significant demand and cost pressures, mostly in social care and that the first two months of this financial year had seen pressures intensify above what was expected.   For example, in Children’s Services, increasing demand was adding a £9m pressure and in Public Health, retendering of a major contract was adding a nearly £2m pressure.

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

He explained that this early budget monitoring report demonstrated that the Council still had some way to go before a sustainable medium term financial plan was achieved and there were many reasons why Members and officers needed to keep working to restore the financial position.   Not least among them, as pointed out by the Section 151 Officer and the Monitoring Officer, was the requirement of the Local Government Finance Act to ensure that the County Council’s spending did not exceed its resources. This £24m forecast overspend was before taking account of any mitigating actions. 

Finally, he said that, given the gravity of this forecast position, it was vital that Members and officers continued their actions 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 detailed in the Annex to the report.

RESOLVED:

1.         That an early forecast revenue budget outturn for 2017/18, ahead of identifying mitigating actions, is a £24m overspend, as set out in the Annex, paragraph 1 to the submitted report. This includes:
£9m savings to be identified,
£7m savings considered unachievable,
£11m service pressures.

2.         That the forecast savings for 2017/18 total £88.4m against £104.0m target be noted, as set out in the Annex, paragraph 31 of the submitted report.

3.         That the Section 151 Officer’s commentary and the Monitoring Officer’s Legal Implications commentary, paragraphs 15 to 18 of the submitted report, be noted.

4.         That the following revenue budget virements be approved:

·      £1m from Early Help to the Multi Agency Safeguarding Hub, as set out in the Annex, paragraph 28 of the submitted report.

·      £3m from Schools and SEND to Children’s Services, as set out in the Annex, paragraph 29 of the submitted report.

·      £14,000 from Budget Equalisation Reserve to Surrey Safeguarding Board, as set out in the Annex, paragraph 30 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.