Agenda item

(CSP: MEC and MEC1)

Purpose: To inform Members of the latest financial performance for 2017/18.

Resolved that the latest financial performance of the Council be noted.

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 6) which informed Members of the latest financial performance of the Council for 2017/18.

Councillor Anthony Chadley introduced the report. The Quarter Two revenue forecast was an overspend of £603k against a net revenue budget of £117.4m, which was 0.5% of the net budget. The main driver of the forecast overspend was a £603k overspend in Adult Social Care (ASC). This was a result of increased complexity in client needs and inflationary pressures.

It was proposed that, in order to help combat some of the inflationary pressures, £392k be released from the ASC Risk Reserve. Councillor Chadley explained that it was considered timely to take this action at this point in the financial year in order to minimise the in year impact.

Councillor Lee Dillon referred to paragraph 5.3 of the summary report, this stated that ‘£392k has been released from the ASC Risk Reserve’. Councillor Dillon therefore queried whether this decision had been pre-empted or whether the wording of the report was incorrect. He noted that in previous financial years, Risk Reserve funds had only been released at the end of the financial year once pressures were known in full and this was a changed tactic. Councillor Dillon noted that this proposal was to meet inflationary pressures, but he was of the view that these should have been forecast.

Councillor Alan Macro queried how much money would be left in the fund after the £392k was released.

Councillor Rick Jones explained that as previously reported, considerable pressures were being felt in Adult Social Care. Inflationary cost increases which were in excess of the level originally forecast, national living wage increases from providers and a greater level of complexity of clients’ needs were particular pressures.

In terms of the ASC Risk Reserve, Councillor Rick Jones firstly explained that it was increased as part of the 2017/18 budget build. It was considered timely to release funds from the Risk Reserve to meet the inflationary pressures as the cost involved was not expected to change. This would also enable future financial reports to present the most clear and accurate financial position for the year.

Councillor Rick Jones added that approximately £700k of the Risk Reserve would remain, both post the proposed use of the £392k and if it was used to fund the entire forecast overspend. Therefore, clearly the current Quarter Two forecast overspend could still be met from this Risk Reserve if necessary.

Turning to Public Protection and Culture, Councillor Dillon noted that the service was forecasting an overspend of £128k due in part to a payment from Kennet School for Kennet Leisure Centre of £43k that was still in dispute. This had been the case for some years and Councillor Dillon queried what progress had been made.

Councillor Hilary Cole noted that Councillor Dillon had asked this question when the Quarter One report was discussed. As explained at that time, discussions on this matter had continued to be protracted and complex, and therefore remained unresolved to date.

Councillor Dillon referred to the point made in the report that 26.4% of the 2017/18 Capital Programme was committed as at the end of Quarter Two. He questioned why this was not higher at this stage of the financial year and whether there were any particular projects that were not expected to be funded within 2017/18.

In response to this query, Councillor Chadley referred Members to section 11 of the report which provided an update on capital expenditure across the Council. He acknowledged that there was some slippage, but this was to be expected in some cases/for some projects. Councillor Chadley reported that no projects had been cancelled. Councillor Chadley added that updates would continue to be provided on an ongoing basis.

RESOLVED that:

·         The latest financial performance of the Council be noted.

·         £392k be released from the Adult Social Care Risk Reserve to help the service combat some of the inflationary pressures it is facing.

Other options considered: n/a – factual report for information.