Agenda item

RESOLVED:

1.    That the Council’s overall budget position as at 30 June 2018 was noted:

·         £11.8m forecast revenue year end overspend,

·         £65.5m forecast planned MTFP savings, against £66.0m target,

·         £15m increase in pressures against £108m anticipated, and

·         £31.4m forecast service capital programme year end underspend.

2.    That officers be requested to report the next Cabinet meeting on plans to bring the 2018/19 budget back into balance.

3.    That the measures to achieve £15m additional in-year savings outlined in Annex 1, paragraphs 6 to 8 of the submitted report was approved.

Reason 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 Overview Select Committee]

The Leader of the Council introduced the monthly budget monitoring report and explained how the Council was facing considerable continuing budget pressures, both from cuts to funding but most significantly because of increases in demand for services, especially in social care.

He further explained that this year’s budget was balanced through the significant use of one-off sources of funding, including taking £21m from reserves and that this could not continue.  To make the Council’s finances sustainable he had requested the Chief Executive to lead a programme to transform the Council to deliver sustainable services to residents from next year.

He also said that after the first three months of this financial year, the Council had forecasted a significant £12m overspend.  This was largely due to significant budget pressures faced in services for children with special educational needs and disabilities and Surrey was not alone in this.  Nationally, demand for these services continued to be exceptional and Surrey’s increase in demand was similar to the South East average.    However, due to the volumes, the estimated impact on this year’s budget was a £30m increase in costs. The service has identified measures to reduce this by £15m, and was developing mitigating plans as part of its sustainability business case but this currently left a £15m gap, which was driving the forecast overspend.

He went on to say that because of the continued budget pressures faced next year he wanted to ensure that the Council start it in the best financial shape that it could. Following a request, officers had proposed an additional £15m in-year savings that will reduce spending this year, and also in future years.  The Council were also extending the programme of deep dive reviews to increase the confidence from Council plans.  This month the Council would review further progress with this year’s savings programme, next year’s overall savings programme and the capital programme.  Reports on progress and findings would be received at the next Cabinet meeting.

He finished by stating that residents deserved services from this Council that met their needs and provided value for money, and that is what he and fellow Cabinet Members were focused on achieving.

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

RESOLVED:

1. That the Council’s overall budget position as at 30 June 2018 was noted:

·         £11.8m forecast revenue year end overspend,

·         £65.5m forecast planned MTFP savings, against £66.0m target,

·         £15m increase in pressures against £108m anticipated, and

·         £31.4m forecast service capital programme year end underspend.

2. That officers be requested to report the next Cabinet meeting on plans to bring the 2018/19 budget back into balance.

3. That the measures to achieve £15m additional in-year savings as set out below (outlined in Annex 1, paragraphs 6 to 8 of the submitted report) was approved:

‘This report has already highlighted the financial risks faced by the Council this year, and the continuing budget challenges for next year and for the future. To mitigate these risks the Council has developed a series of cost controls and measures to reduce spending and lead to in-year budgets reductions. These will become base budget reduction for future years.

Table 2 shows the list of actions, and the in-year savings, that are proposed. It is not expected that these actions will lead to reductions in the Council’s delivery of services.

Table 2            Measures to achieve in year savings 2018/19

The Council’s forecast revenue outturn position for this month does not yet include the impact of these new savings measures.’

Reason 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.