Purpose of the Report: In advance of the publication of the Council’s Preliminary Financial Strategy, this report sets out the scale of the challenge facing the Council and its approach to setting a balanced budget for 2019/20.
Leigh Whitehouse, Interim Executive Director of Finance
Tim Oliver, Lead Cabinet Member for People
Charlotte Morley, Cabinet Member for Corporate Support
Michael Coughlin, Executive Director for Customers, Digital and Transformation
Key points raised during the discussion:
1. The Interim Executive Director of Finance introduced the item and provided Members with a brief summary. Officers noted that the Preliminary Financial Strategy (PFS) was being considered earlier in the year than expected to ensure that there was a robust engagement for consultations. It was further stated that, due to the uncertainty of funding for the next financial year, the PFS focused on producing a balanced budget for 2019/20. More detail would be provided on the medium term position up to budget setting at the beginning of 2019.
2. Members sought confirmation on how the budget envelopes for each service had been calculated. It was explained that officers initially conducted a series of deep dives into services to review the extend in which they built demand pressures into their budgets which had shown that they were higher than those of other comparable local authorities. These budgets were then further reviewed for inclusion in the budget envelopes.
3. The Chairman of the Audit & Governance Committee provided Members with an update on Recommendation C of the Budget Sub-Group Report July-October 2018. He stated that he had so far identified some initial details on the service-run audit but that he would be later meeting with the appropriate officer for a full response.
4. The Committee asked for details on what safeguards were in place in the event that a service was unable to meet the targets within their relevant budget envelope. Officers stated that they were in the process of validating budget proposals submitted by Executive Directors and if, following this, the services were seen to be off-track, the relevant Executive Director would be supported to find additional savings within their service. Members further noted that, due to services working with the finance team to generate budget envelopes, services now had greater responsibility and accountability to stay within them.
5. It was highlighted that on 25 September 2018 Cabinet accepted a finance improvement plan to address some of the concerns raised following a review of the Council’s finances.
6. A Member of the Committee felt that it would be appropriate to appoint a Cabinet Member with a portfolio specifically responsible for the Council’s finances.
• endorse the strategic activity taking place to ensure the Council achieves financial sustainability and a balanced budget in 2019/20.
• recognised there will be greater budget accountability processes in place with sign off being required from relevant Cabinet Members and Officers.
• recommend risks and RAG statuses to be included alongside all budgetary information produced by the finance team (including forecast revenue budgetary information and proposed in year savings plans).
• agree that at least two meetings of the Sub-Group (to include Chairman of relevant Select Committees as appropriate) to be scheduled between October 2018 and January 2019 to cover in-depth proposals made to deliver services within budget envelopes with recommendations being shared with Cabinet in January 2019.
• agreed for the Chairman of the Audit and Governance Committee to review the Audit of ISPSB (Individual Statements of Pupil Support Budgets) payments item within the cost containment plan and in particular the £800k overpayments for ISPSBs.
• review budget proposals in January 2019 before consideration by Cabinet (29 January), to include an update on consultation and engagement activity which has taken place with residents and stakeholders as part of budget setting process.
• Request that transformation plans are mapped against the 2019/20 budget envelope proposals by directorate and provided to Members.