Agenda item

RESOLVED:

To note that:   

1.    The Council achieved £1.3m overall revenue underspend for 2017/18 (Annex 1, paragraph 1 of the submitted report). This is the eighth successive year the Council has achieved a small underspend or balanced outturn. The £1.3m underspend is less than 0.08% of the Council’s £1,672m gross expenditure budget for 2017/18.

2.    Services achieved £80m total savings against £95m agreed savings plans and £104m target (Annex 1, paragraph 52 of the submitted report).

3.    The Council planned to transfer £11.8m from reserves to balance 2017/18. After transferring the net underspend for 2017/18 and other movements in the year, the closing balance for earmarked reserves as at 31 March 2018 is £81.4m. After deducting planned use of £20.9m earmarked reserves to balance 2018/19, this leaves £60.5m earmarked reserves and £21.3m general balances, which the Director of Finance considers to be the minimum safe levels.

4.    The underspend does not include £1.0m revenue carry forward requests for spending on planned service commitments that continue beyond 2017/18 (Annex 1, paragraphs 49 to 51 and Annex 3 of the submitted report). If Cabinet agrees to fund all carry forward requests, earmarked reserves brought forward as at 1 April 2018 will fall to £59.5m.

5.    The Council invested £212m through its capital programme in 2017/18, comprising £109m service capital programme (59% of the original service capital programme) and £103m long term investments (Annex 1, paragraph 65 of the submitted report). Services have requested to carry forward and reprofile £35m capital expenditure.

6.    The Council’s year end earmarked reserves and balances, debt analysis and treasury management report (Annex 1, paragraphs App 7 to App 23 of the submitted report).

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

8.    The Section 151 Officer’s commentary and the Monitoring Officer’s Legal Implications commentary in paragraphs 16 to 19 of the main budget monitoring report to Cabinet 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:

9.    £1.3m transfer of net 2017/18 underspend to the Budget Equalisation Reserve.

10.  £1.0m revenue carry forward requests to be funded from the Budget Equalisation Reserve (Annex 1, paragraph 50 and Annex 3 of the submitted report).

11.  £2.1m capital virement requests within Highways & Transport (Annex 1, paragraph 67 of the submitted report).

12.  As in 2017/18, that Cabinet approves services’ draw down of amounts carried forward, as and when they are needed, as part of the monthly budget monitoring process (Annex 1 of the submitted report, paragraph 51 for revenue and paragraph 69 for capital).

13.  £3.9m transfer of Revolving Infrastructure & Investment Fund net income to the Budget Equalisation Reserve (Annex 1, paragraph 71 of the submitted report).

14.  That the £34.9m capital programme reprofiling and carry forward requests as in (Annex 1, paragraphs 68 to 70 and Annex 3 of the submitted report) be subject to further discussions involving the Leader, Chief Executive and Director of Finance before coming back to the next meeting of Cabinet for a decision.

Reasons for decisions:

This report was 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 Scrutiny Committee]

The Leader of the Council explained that the budget outturn report for 2017/18 showed that Surrey County Council achieved an underspend of £1.3m – the eighth year in a row that the Council had managed to achieve a balanced budget or underspend, despite reductions in Government grant and growing demand for services.

He further explained that the Council had delivered savings of £80m in 2017/18 – the highest ever figure in a single year, and annual costs had been reduced by £540m since 2010.  However, the Council was very aware that a great deal more needed to be done in future to continue to balance the books and provide services that residents expected.  He stated that it was expected that the challenge was going to get harder.  It was important that everyone worked together as one team because the Council needed to save a further £250m from the annual budget within the next three years and that this would require a great deal of change in how services were provided to residents.

This challenge was an opportunity to transform how the Council served its residents and an opportunity to transform how the Council worked with its partners, the voluntary sector and businesses.  It was recognised that it would be difficult and some of the changes controversial, but that it would provide lasting improvement for communities.

The Leader thanked the Director of Finance and her team for the hard work in putting this report together early, which was a major achievement.  He explained that the Cabinet would not normally see the outturn report until the September.

Each Cabinet Member was given the opportunity to highlight key points and issues from their portfolios.

The Cabinet Member for Adults thanked staff is Social Services for all their hard work which was reiterated by the Leader who explained that staff had worked very well with the NHS in order to get people back to their homes in a timely manner.

The Cabinet Member for Children explained some of the causal factors for the overspend in her service area.  With regard to Unaccompanied Asylum Seeking Children (UASC) the Leader reported that he had put it to the Government that some of the overseas budget should be used to help fund looking after these children.  He would continue to argue for this.

The Cabinet Member for Highways explained that the service had come in on budget.

The Cabinet Member for Environment and Transport reported a £3.8m overspend on the waste budget.  Due to the delays in the Ecopark savings had been made against that so overall had come in on budget and was able to donate to the sinking fund.

The Cabinet Member for Education reported that there was a £9.3m overspend to go forward to next year and explained how she was working with schools to ensure that children with SEND were kept as close to the county as possible.

The Cabinet Member for Health reported that the Council has received repayment from the East Surrey Clinical Commissioning Group.  The Leader explained that he and the Chief Executive were awaiting a date to meet with the Secretary of State for Health to discuss funding for public health.

The Cabinet Member for Communities expressed thanks to the fire service for their commitment, discipline and looking after the service.

RESOLVED:

To note that:   

1.    The Council achieved £1.3m overall revenue underspend for 2017/18 (Annex 1, paragraph 1 of the submitted report). This was the eighth successive year the Council had achieved a small underspend or balanced outturn. The £1.3m underspend was less than 0.08% of the Council’s £1,672m gross expenditure budget for 2017/18.

2.    Services achieved £80m total savings against £95m agreed savings plans and £104m target (Annex 1, paragraph 52 of the submitted report).

3.    The Council planned to transfer £11.8m from reserves to balance 2017/18. After transferring the net underspend for 2017/18 and other movements in the year, the closing balance for earmarked reserves as at 31 March 2018 was £81.4m. After deducting planned use of £20.9m earmarked reserves to balance 2018/19, this left £60.5m earmarked reserves and £21.3m general balances, which the Director of Finance considered to be the minimum safe levels.

4.    The underspend did not include £1.0m revenue carry forward requests for spending on planned service commitments that continue beyond 2017/18 (Annex 1, paragraphs 49 to 51 and Annex 3 of the submitted report). If Cabinet agreed to fund all carry forward requests, earmarked reserves brought forward as at 1 April 2018 would fall to £59.5m.

5.    The Council invested £212m through its capital programme in 2017/18, comprising £109m service capital programme (59% of the original service capital programme) and £103m long term investments (Annex 1, paragraph 65 of the submitted report). Services had requested to carry forward and reprofile £35m capital expenditure.

6.    The Council’s year end earmarked reserves and balances, debt analysis and treasury management report (Annex 1, paragraphs App 7 to App 23 of the submitted report).

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

8.    The Section 151 Officer’s commentary and the Monitoring Officer’s Legal Implications commentary in paragraphs 16 to 19 of the main budget monitoring report to Cabinet state 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:

9.    £1.3m transfer of net 2017/18 underspend to the Budget Equalisation Reserve.

10.  £1.0m revenue carry forward requests to be funded from the Budget Equalisation Reserve (Annex 1, paragraph 50 and Annex 3 of the submitted report).

11.  £2.1m capital virement requests within Highways & Transport (Annex 1, paragraph 67 of the submitted report).

12.  As in 2017/18, that Cabinet approves services’ draw down of amounts carried forward, as and when they are needed, as part of the monthly budget monitoring process (Annex 1 of the submitted report, paragraph 51 for revenue and paragraph 69 for capital).

13.  £3.9m transfer of Revolving Infrastructure & Investment Fund net income to the Budget Equalisation Reserve (Annex 1, paragraph 71 of the submitted report).

That the following be carried forward:

14.  That the £34.9m capital programme reprofiling and carry forward requests as in (Annex 1, paragraphs 68 to 70 and Annex 3 of the submitted report) be subject to further discussions involving the Leader, Chief Executive and Director of Finance before coming back to the next meeting of Cabinet for a decision.

Reasons for decisions:

This report was presented to comply with the agreed policy of providing a monthly budget monitoring report to Cabinet for approval and action as necessary.