Witnesses:
Anna D’Alessandro,
Director of Corporate Finance
Mel Few, Cabinet Member for
Resources
Leigh Whitehouse, Executive
Director of Resources
Rachel Wigley, Director of
Financial Insight
Key
points raised during the discussion:
- The
Director of Corporate Finance presented headlines of the report. At
outturn of the financial year 2019/20, a small surplus of
£200,000 had been delivered on revenue. All services had
contributed to this surplus. £2.6m had been added to the
contingency, as well as £2.8m that had been added to the
general fund reserve. In 2019/20, £82m of efficiencies had to
be delivered, and there was slippage of £9.5m, comparing
favourably to slippage of £22m in 2018/19.
- The
Director continued to explain that there had been two tranches of
Covid-19 funding from government, totalling £47m. Of that,
£900,000 had been spent on Covid-related costs and income
loss in 2019/20, and the rest would be carried forward to 2020/21.
A ‘Delta 2’ return had been submitted to the Ministry
of Housing, Communities and Local Government (MHCLG) on 15 May.
Work conducted with finance business partners had identified that
£4.3m of efficiencies would be undeliverable because of
Covid. The reporting to MHCLG was consistent with what other
counties were reporting.
Ayesha Azad joined the meeting at 10:33am.
- After the
2020/21 budget, the Finance team had conducted an extensive
‘wash-up’ exercise in partnership with Democratic
Services around Select Committee involvement in the budget process.
For the 2021/22 budget, Select Committees would be involved in the
process more and earlier, conducting two rounds of scrutiny in
September-October and December. The 2021/22 budget would be
discussed at the first round of budget scrutiny in
September/October 2020 and the second round in December
2020.
- A Member
noted that there had been an improvement in the final month of the
year, with £5.6m additional savings. He asked why this had
come so late and whether services were holding back savings until
the end of the year. The Director of Corporate Finance said that
the latter was not the case and services worked hard to achieve
efficiencies all year. Sometimes efficiency needs did not become
clear until the end of the year, as well as certain events that
could only be undertaken at year-end from a Corporate Finance
perspective. She acknowledged that the Council still had some way
to go to refine forecasting. The Cabinet Member for Resources added
that paragraph six of the report showed explanations for the
delivery of efficiencies in month 11.
- A Member
remarked that in the years she had been a Surrey county councillor,
she did not remember Special Educational Needs and Disabilities
(SEND) ever coming within budget, despite promises that the numbers
would be brought under control. Were there assurances that it would
now be under control without this being detrimental to young
people? The Director of Financial Insight responded that there was
now a transformation programme board chaired by Julie Iles as well
as other relevant scrutiny. In 2019/20, there had been a £29m
overspend had been projected; in reality, the overspend had been
£1m higher than this, at £30m. The SEND overspend
target for 2020/21 was £24m, and at the moment the Council
was on target to achieve this; it was a top priority. The Executive
Director of Resources acknowledged the long-standing nature of this
issue and said it was a high-value and volatile area. At the
moment, the Council was stuck between not being able to recognise
SEND as a general fund pressure and not being funded for the
pressure as part of the schools delegated budgets. In relation to
the above point, a Member commented that surely projecting an
overspend every year meant that the budget was incorrect in the
first place. Was the Council being overoptimistic or setting our
budget incorrectly? The Director of Financial Insight explained
that SEND expenditure was funded through the dedicated schools
grant (which came from the government), so in effect the Council
was not being given enough government funding for SEND. New rules
had been brought in that prohibited the Council from using its
general fund for SEND expenditure. The Council was trying to bring
SEND costs down. The Executive Director added that the Council was
providing for the overspend and setting it aside on the balance
sheet.
- A Member
referred to the £900,000 recovery relating to
Children’s services, and asked what this entailed. The
Director of Financial Insight replied that she did not have that
information to hand and would respond to this outside the
meeting.
- The topic
of performance data, particularly with regards to areas that fell
outside this Select Committee’s remit, was raised, and the
Executive Director said that he was working on bringing performance
data to other Select Committees.
- Regarding Covid-19 related costs, a Member asked
whether the Council had now received funding from the government
for the Test and Trace system. Considering that Surrey was a leader
in the South East, and that Surrey County Council’s normal
Public Health grant was one of the lowest in the country, the
£3.5m Test and Trace funding seemed quite low. Would the
Council supplement this using its own budget? The Executive
Director responded that the funding was based on historic Public
Health grant allocations, which could be problematic for Surrey
County Council due to its low funding in the past. If more was
needed, the same principles would apply as other Covid related
spending. The Member enquired whether there was an indicative
budget on how much Test and Trace would cost in total – how
much more or less than £3.5m would it be? The Executive
Director said that at the moment they were waiting for the Test and
Trace plan to be finalised; once it was, they would conduct the
appropriate reviews to ensure there was sufficient
funding.
- A Member
queried whether there had been any feedback from the government on
the Council’s monthly Covid costs submissions. The report
states that the Delta 2 submission to MHCLG (in May 2020) had
forecast unmet efficiencies due to Covid of £15.8m, but that
this had since been revised to £4.3m. A Member raised this
and asked why this had changed. The Director of Corporate Finance
said work had been done to determine in which services efficiencies
would not be delivered, and the £4.3m represented unmet
efficiencies in adult social care (ASC). She would share details of
the movement from £15.8m to £4.3m. For Delta 1 (April
2020), there had not been a steer from central government on how to
fill in the Delta form, leading to discrepancies between different
Local Authorities (LAs), so Grant Thornton had been commissioned by
the County Councils Network to compare different LAs, which had
since led to increased consistency.
- A Member
asked how infection control funding from government was distributed
to care homes. The Executive Director explained that Surrey had
been allocated around £19m for infection control in care
homes, three quarters of which would be channelled straight to care
homes. The remaining quarter could only be distributed to care
homes once they had reached certain criteria to demonstrate
implementation of effective infection control.
- A Member
praised the Council’s initiative in setting up the Seacole
Centre at Headley Court[1] and asked whether the building
and equipment were leased or purchased. The Director of Financial
Insight replied that the Council’s involvement in that had
been to prepare the building for the NHS, so the Council’s
spending on that would be fully reimbursed by the NHS. The
Executive Director added that Headley Court was a privately owned
property that had been leased until November at the earliest. The
equipment was all owned by the NHS.
Recommendations:
- That a
summary of the following be presented in the next report at the
October Select Committee meeting:
- the latest
financial situation around COVID-19 and the latest information
regarding the government’s Test and Trace
programme;
- the updated
assessment of the impact of COVID-19 on Surrey County
Council’s short- and medium-term financial position;
and
- the
financial support being provided to the Council’s most
vulnerable.
Actions/further information to be provided:
- The
Director of Financial Insight to provide details on the
£900,000 recovery in Children’s services;
- The Director
of Corporate Finance to share details of why the forecast
efficiencies unmet due to Covid changed from £15.8m (Delta 2)
to £4.3m.