Agenda item

RESOLVED:

That the following be noted: 

1.    Forecast revenue budget outturn for 2017/18 is £18m overspend (Annex 1, paragraphs 1 and 8 to 41 of the submitted report). This includes:  £9m savings to be identified, £16m savings considered unachievable in 2017/18, £13m service demand pressures less £20m underspends, additional savings and income.

2.    Significant risks to the revenue budget (Annex 1, paragraphs 42 to 47) could add £13m to the forecast overspend, including: £9m in Children, Schools & Families and £3m in Adult Social Care.

3.    Forecast planned savings for 2017/18 total £79m against £95m agreed savings and £104m target (Annex 1, paragraph 50 of the submitted report).

4.    All services continue to take all reasonable action to keep costs down and optimise income (e.g. minimising spending, managing vacancies wherever possible etc.).

5.    The Section 151 Officer’s commentary and the Monitoring Officer’s Legal Implications commentary in paragraphs 16 to 19 of the report state that the council has a duty to ensure its expenditure does not exceed resources available and move towards a sustainable budget for future years.

That the following be approved:

6.    Transfer £0.9m revenue from the New Homes Bonus budget to the Strategic Transport group to enable major transport scheme development to continue (Annex 1, paragraph 48 of the submitted report).

7.    Increase the SEND reform staffing budget by £0.6m and to increase the corresponding grant income budget by £0.6m (Annex 1, paragraph 49 of the submitted report).

8.    Reprofile £0.9m of Surrey Fire & Rescue Service’s vehicle and equipment replacement programme capital budget from 2017/18 to 2018/19 (Annex 1, paragraph 66 of the submitted report).

9.    Draw down £83,000 from amounts carried forward from 2016/17 by Schools & SEND for planned spend on school kitchen schemes in 2017/18 (Annex 1, paragraph 67 of the submitted report).

Reason for Decisions:

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 Scrutiny Committee]

The Leader of the Council presented the budget monitoring report for the eighth month of the 2017/18 financial year, covering the period up to 31 October 2017.

He explained that in February this 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 ability to raise funds locally.  To balance 2017/18 budget the council had to make plans to deliver an unprecedented £104m of savings.  This significant challenge for the council came on top of already making over £450m savings since 2010.

He also explained that within the £104m savings target, the council had agreed plans for £95m savings, with £9m savings to be identified.   After seven months of the financial year, services had already achieved £55m of savings with another £19m on track for delivery, and £5m facing potential barriers. At this stage, £16m savings were now thought to be unachievable in this year.

The council’s 2017/18 budget included significant demand and cost pressures, mostly in social care. In the first seven months of the year, demand had increased above that forecast even a short time ago.   For example, in Children’s Services, demand continued to increase and was expected to add a £9m pressure by the end of the financial year.  Partially offsetting these pressures, there were forecast underspends elsewhere, including in Children Schools & Families, Adult Social Care, Orbis, Highways & Transport, Waste and Central Income & Expenditure.

The combined impact of delivering lower savings than planned and demand rising faster than anticipated is a forecast year end overspend of £18m for 2017/18.   This is a £1m increase on last month’s forecast position.  Additional volatility-related risks that are outside the council’s control remain in some key budgets and the forecast year end position could potentially worsen. 

He concluded that services had already taken action as part of the recovery plan to reduce costs by £4m.  However, he also stressed the need to continue to take all reasonable action to manage spending within available resources by keeping costs down, managing vacancies, optimising income and being aware of the current financial position before committing additional future expenditure.

Cabinet Members spoke of the financial and demand pressures as well as work being undertaken in their portfolio areas.

RESOLVED:

That the following be noted: 

1.    The forecast revenue budget outturn for 2017/18 is £18m overspend (Annex 1, paragraphs 1 and 8 to 41 of the submitted report). This included:  £9m savings to be identified, £16m savings considered unachievable in 2017/18, £13m service demand pressures less £20m underspends, additional savings and income.

2.    That significant risks to the revenue budget (Annex 1, paragraphs 42 to 47) could add £13m to the forecast overspend, including: £9m in Children, Schools & Families and £3m in Adult Social Care.

3.    The forecast planned savings for 2017/18 total £79m against £95m agreed savings and £104m target (Annex 1, paragraph 50 of the submitted report).

4.    That all services continue to take all reasonable action to keep costs down and optimise income (e.g. minimising spending, managing vacancies wherever possible etc.).

5.    The Section 151 Officer’s commentary and the Monitoring Officer’s Legal Implications commentary in paragraphs 16 to 19 of the report stated that the council had a duty to ensure its expenditure did not exceed resources available and move towards a sustainable budget for future years.

That the following be approved:

6.    The transfer of £0.9m revenue from the New Homes Bonus budget to the Strategic Transport group to enable major transport scheme development to continue (Annex 1, paragraph 48 of the submitted report).

7.    That the SEND reform staffing budget be increased by £0.6m and to increase the corresponding grant income budget by £0.6m (Annex 1, paragraph 49 of the submitted report).

8.    That £0.9m of Surrey Fire & Rescue Service’s vehicle and equipment replacement programme capital budget from 2017/18 to 2018/19 be reprofiled (Annex 1, paragraph 66 of the submitted report).

9.    That £83,000 from amounts carried forward from 2016/17 by Schools & SEND for planned spend on school kitchen schemes in 2017/18 be drawn down (Annex 1, paragraph 67 of the submitted report).

Reason for Decisions:

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 Scrutiny Committee]