Agenda item

(CSP: MEC)

Purpose: To inform Members of the latest financial performance of the Council.

Resolved that:

·         The latest financial performance of the Council be noted.

·         The transfer of £657k budget from Care Commissioning, Housing and Safeguarding to Adult Social Care, as detailed in the report and in line with financial regulations, be approved.

This decision is not subject to call in as:

·      Report is to note only

therefore it will be implemented immediately.

The Executive considered a report (Agenda Item 7) concerning the latest financial performance of the Council.

Councillor Roger Croft presented the report and firstly highlighted the recommendation for the Executive to transfer, in line with Financial Regulations, £657k from Care Commissioning, Housing and Safeguarding to Adult Social Care (ASC).

At Quarter One, the forecast revenue position was an overspend of £1.28m against a net budget of £116.8m. This was a matter of some concern and significant effort would be given to reducing this deficit during the course of the financial year.

The majority of the overspend was attributed to the Communities Directorate which was forecasting an overspend of £1.033m. £996k of this related to ASC and was as a result of an increase in client numbers and the complexity of their needs, together with an upward trend in the cost of commissioning nursing and residential care services. Councillor Croft pointed out that a risk reserve of £1.1m had been set aside at the start of the financial year to allow for unforeseen pressures such as these on the ASC budget. It might therefore prove necessary for this risk reserve to be utilised, but Councillor Croft reiterated that efforts would firstly be made to reduce the deficit.

Children and Family Services (CFS) were forecasting an overspend of £37k due to pressure on the Adoption Panel Joint Arrangement. This pressure could be met from the £500k risk reserve set up for unforeseen costs in CFS.

An overspend of £259k was also being forecast in Legal Services due to cost pressures as a result of the London Road Industrial Estate (LRIE) procurement challenge and pressure on fee income. The Legal Services risk reserve of £50k could be used to help offset this pressure, but the Council was also looking to reclaim its costs from the LRIE judicial review.

Councillor Croft also took the opportunity to highlight that the Council’s 2015/16 financial statements had been approved with no significant issues raised by the Council’s external auditors (KPMG).

Councillor Alan Macro referred to the point made that the ASC overspend was partly due to an increase in client numbers. However, Councillor Macro pointed out that increases had occurred on many occasions in recent years and queried whether more accurate forecasting was needed. He also made the point that the ASC risk reserve had been used to support CFS budgets in recent years and this could not be the case in 2016/17 due to the ASC pressures.

Rachael Wardell explained that the ASC risk reserve had been formed to help manage volatile areas and the majority of items contributing to the overspend were of that type. Therefore the risk reserve could be used for this purpose if necessary.

Councillor Lynne Doherty acknowledged that pressures in CFS had been offset in previous years by the ASC risk reserve, but CFS had its own reserve making this action unnecessary. She did however add that areas of pressure previously experienced, i.e. agency spend, was being well managed.

Councillor Macro then queried the level of confidence in reclaiming the costs incurred from defending the LRIE judicial review. Councillor James Fredrickson explained that a timeframe had been established for recouping costs and the first instalment of £70k had been received.

Councillor Macro’s final query related to the £44k pressure in Culture and Environmental Protection and whether this was accurate when considering that the savings identified for the Library Service for 2016/17 could not be realised when the service was continuing pending the outcome of the needs assessment. Councillor Dominic Boeck pointed out that transitional funding had been allocated to the Library Service for 2016/17.

Councillor Lee Dillon noted that £6.6m of capital expenditure would be re-profiled into 2017/18 and queried whether this could relieve in year revenue budget pressures from reduced revenue contributions to capital. Councillor Croft felt that the impact of this re-profiling on the revenue budget would be minimal, but agreed to provide a written answer on this point.

Councillor Macro pointed out a typographical error in the supporting information (within paragraph 1.19(4)). ‘Theale Green Primary School’ needed to be amended to ‘Theale Church of England Primary School’.

RESOLVED that the transfer of £657k from Care Commissioning, Housing and Safeguarding to Adult Social Care be approved, as detailed in paragraph 5.8 of the report and in line with Financial Regulations.

Reason for the decision: To inform Members of the latest financial performance of the Council.

Other options considered: None.