Agenda item

To scrutinise the latest financial performance of the Council.

Andy Walker introduced the report to the Commission. He stated that the Month Seven financial forecast was an over spend of £754k against a net revenue budget of £117.4million. The forecast would have an impact on the level of the Council’s reserves at year end if the over spend could not be brought down by year end. The provisional Month Eight position showed a worsening of the situation to an overspend of around £1m. This continued to be an area of high focus for Executive Members and Corporate Board. 

Members heard that the main driver for the forecast overspend was the £732k overspend in Adult Social Care (ASC). The over spend was as a result of increased complexity of client needs and inflationary pressures. The Communities Directorate were tasked with managing unnecessary expenditure to manage the overspend and the position was reported to Corporate Board also.

Councillor Anthony Chadley referred to the graph provided (4.2) in the report which detailed the forecast net revenue position for 2017/18 and included a comparison with the net revenue budget for 2016/17. This showed the reductions achieved to the overspend during the latter half of 2016/17 and the ability to reduce overspends. Efforts would be made to repeat this.  Furthermore, the chart in 5.1 of the report was included to add transparency to the situation - which he hoped Members would find useful.

Councillor Dillon asked whether inflation rates were considered within the budget build and questioned the decision to meet inflation pressures in-year rather than at year end as in previous years. Rachael Wardell advised that it was factored into the budget but inflationary pressures in 2017/18 exceeded the forecasted level and the decision had been taken to meet these pressures in-year. Andy Walker advised that this also provided justification for the Reserve Fund as it was considered an area of potential risk - which had since materialised.

In response to questions asked about the forecasting model, the Commission heard that forecast modelling was improving but it was likely to take a similar line due to the nature of the challenge. Although Rachael Wardell agreed that they would prefer to see a less severe curve in overspend.

Councillor Lazlo Zverko asked whether the severe weather in December 2017 produced financial pressures within the Council. Andy Walker advised that the monthly report would be collated from services to form the Month 9 update. He suggested that Members would have a definitive response to this question in the detail of the next financial report.

Councillor Marigold Jaques suggested that the pressure within ASC was going to increase - along with the ageing population. Andy Walker advised that modelling around ASC financial pressures was improving but he agreed that demand was likely to increase. 

Councillor Dillon felt that it would be useful if the task group considered the need to more carefully manage budgets throughout the year, rather than imposing restrictions in the final quarter of the year. Councillor Chadley reiterated that modelling had become more sophisticated and this would improve forecasting.

Resolved that:

(1)       The report was noted.