Agenda item

(CSP: MEC & MEC1)

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

Resolved that:

·         The latest financial performance of the Council be noted.

·         £509k be released from the Adult Social Care Risk Reserve. This approval confirms the forecast overspend of £860k.

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

Councillor Anthony Chadley drew Members attention to the proposal in the report to release £509k from the Adult Social Care (ASC) Risk Reserve. Subject to the Executive’s approval on this matter, this would mean that the current financial forecast would be an overspend of £860k against a net revenue budget of £117.4m. If the reserve was not released as proposed, then the overspend would be £1.37m. Either way, the forecast would have an impact on the level of the Council’s reserves at year end if the overspend could not be brought down by this time.

Councillor Chadley also highlighted a typographical error in both the summary report and supporting information. Paragraph 5.4 of the summary report and paragraph 1.3 of the supporting information should both state that the Education forecast overspend had increased by £124k from the previous quarter.

Councillor Lee Dillon had a number of questions on this report. If the proposed release of the ASC Risk Reserve was approved, then just over £900k would have been released to date from this fund in 2017/18 and the fund would then total £1.044m. He queried whether there was confidence that it would not prove necessary to fully utilise the Risk Reserve. Councillor Dillon also noted a risk to the ASC budget should providers withdraw their services.

Councillor Chadley highlighted that the service specific risk reserves had been established for specifically identified risks. A decision had already been made and a further decision proposed in this report to release funds from ASC Risk Reserve as risks materialised in-year and it was considered right to make adjustments in-year, in particular to meet increased inflationary costs. However, the potential to use the risk reserves was always carefully considered and efforts continued to drive down overspends. Councillor Chadley added that extensive work had been undertaken to improve both the modelling of risks and forecasting, and this would continue moving forward.

Councillor Rick Jones described the efforts made in ASC to improve forecasting in this volatile area which was under considerable pressures. He stated that he was reasonably confident that the forecast overspend for 2017/18 was as accurate as possible, beyond the emergence of a major pressure. Councillor Rick Jones added that risks were published via the Council’s Strategic Risk Register.

Moving to transformation funding, while some investment had taken place, £1m had been placed into a Transformation Reserve and around £660k of this remained unallocated. Councillor Dillon was concerned that there had not been greater use of the fund to transform services and he asked how this could be expedited. In response to this point, Councillor Chadley explained that use of the Transformation Reserve was only considered for projects that could maximise best value from this relatively small sum, i.e. commercialisation. A risk averse approach was taken and it was the aim to use this Reserve as efficiently as possible.

Councillor Dillon next referred to the overspend in the Education Service. He queried whether the costs incurred by the Disabled Children’s Team should also be contributed to by Children and Family Services as this would provide a more realistic picture of where pressures were being felt and where costs were met from. Councillor Lynne Doherty clarified that this team was within Children and Family Services and they made the placements. Costs were currently met in Education.

Councillor Dillon asked for an explanation for the increase to salary costs and agency staff costs in the Communities Directorate. Salary costs had increased by £2.5m and agency costs by £670k from that originally budgeted. Councillor Chadley explained that increased salary costs in fact related to a re-identification of the amounts and this was in line with expectations. It was highlighted in the report to provide greater transparency, it would also aid comparisons. Councillor Chadley added that agency costs had increased in Month Nine to cover sickness absence in front line services.

RESOLVED that:

·         The latest financial performance of the Council be noted.

·         £509k be released from the Adult Social Care Risk Reserve. This confirmed the forecast overspend of £860k.

Other options considered: Not applicable.