Agenda item

To inform the OSMC of the latest revenue financial performance of the Council.

The Commission considered a report (Agenda Item 11) concerning the 2018/19 Revenue Financial Performance for Month Five. Andy Walker introduced the report and explained that the aim of it was to inform Members of the latest revenue financial performance for 2018/19. It was clear from the report that the Council’s position had worsened since the previous period. The Month five forecast was an overspend of £1.9m, which was 1.6% of the net budget. The forecast overspend had increased by £634k from Month Four. The main increases were £165k in Adult Social Care commissioning and £200k in Children and Family Services as a result of increased expenditure on childcare lawyers attributable to the increase in complex cases. Finally £118k was attributable to Transport and Countryside largely due to a range of pressures on the car parking budget.

Andy Walker explained that the Council’s Executive were eager to mitigate the position. The £1.9m already took in to account cutting unnecessary spending. The senior management team and Members would be working to maximise mitigation action going forward.

Councillor Tim Metcalfe noted that the net revenue budget was detailed as £119.4m in the finance report however, had been noted as £125.4m on page 81 of the performance report (Agenda Item 10). Andy Walker stated that he would need to clarify the figure however, expected that the discrepancy between the figures was linked to the Better Care Fund. Andy Walker would report back on this at a later date once confirmation had been sought from Officers.

Councillor Dillon noted that there was no plan to deploy risk reserves in year and queried how much of the pressure was inflationary.

Councillor Dillon noted that the aim was to slow spending across the Council and queried what monitoring would take place on the reduction in spending to assess the impact of mitigating action on service provision.

Nick Carter explained that the aim was to pull services back in order to save £1.2m and the progress to date was very positive. Both vacancies and recruitment had been slowed down and conversations were taking place with each Head of Service to identify where spending could be reduced. Nick Carter stated that if there were to be impacts upon services then Portfolio Holders would be involved. Currently there were no plans to make any dramatic changes to services. It was possible that there might also be other opportunities on the horizon such as funding from Government for pressures being faced by ASC. Delayed Transfers of Care (DToC) were the cause of some of the overspend and although performance was good for DToC locally, this was not sustainable. It was anticipated that by month six, there would be a much clearer picture of the progress mitigating actions were having in helping to offset the deficit.

Andy Walker reported that risk reserves had not been deployed until the end of the last financial year. The report was very transparent regarding what the risks were however, at the moment the Executive had chosen not to deploy the risk reserve funding. Councillor Dillon queried the reason behind this decision. Nick Carter confirmed that the Executive wanted to focus on mitigating action in the first instance and then review the decision to deploy risk reserves later in the year.

Councillor Dillon queried why car parking income was not on target and Nick Carter stated that there were a variety of reasons. Firstly the number of people parking had decreased within the town. Nick Carter added that there were also enforcement issues and suggested that a written response be requested from the Highways Department on this. Andy Walker stated that the car parking issue was a yield issue.

Councillor Somner commented that in Reading, the Council had taken over all of the car parks and increased the cost for parking. Going forward this could cause more people to visit Newbury as an alternative to the increased charges.

Councillor Zverko asked for a response to be brought to the next meeting regarding the cost of grass verge cutting. Due to the extreme weather conditions of the past summer, less service had been required and therefore a windfall might be received in month nine or ten. Nick Carter stated that two rural cuts were undertaken per year  and one was only just beginning. Nick Carter stated that Paul Hendry could provide further detail on this. Councillor Somner stated that he had spoken to Paul Hendry and been informed that cutting was not happening. The contractor was having to increase staffing levels to ensure they could meet the four week cycle.  

Councillor Webster noted that a SWEP was planned for November and the cost of this would be higher than the grant received. Councillor Webster asked that Andy Walker provide some detail to help Members understand the cost of the SWEP.

Councillor Webster noted in paragraph 5.4 that the Development and Planning Service was forecasting an underspend of £142k due primarily to salary and associated savings in the service. Councillor Webster was aware of the vacancies in the department and asked for assurance that vacancies would not be held and used as a way to generate savings going forward as this would continue to mean that planning performance indicators were not met. Nick Carter felt that some savings could be achieved by the reduced volume of planning applications.

Councillor Webster referred to page 136 which detailed a decline in the Council’s use of Shaw House. Councillor Webster asked if Officers were satisfied that all was being done to turn this situation around. Nick Carter stated that there was an ambitious business plan for Shaw House and there had been a struggle to meet the income target. Shaw House had experienced greater success from external clients however, Nick Carter stressed that it was having to deal with a difficult trading environment. The income target had not been met for three to four years and it was suggested that this could be challenged.

Councillor Dillon questioned if use of the other risk reserves was solely for decision by the Executive. Andy Walker confirmed that general funds were utilised by the Executive however, there were ‘earmarked’ reserves that could only be used for that defined purpose. The aim would be to use the ‘earmarked’ reserves to mitigate the positon before accessing the general reserve.

Councillor Dillon noted that one of the reasons for the overspend was due to under-forecasting and he queried if lessons had been learned for the next financial year to avoid the same situation occurring. Councillor Dillon also asked if any benchmarking had taken place with other local authorities around ASC budgets and forecasts. Nick Carter commented that most councils were facing a significant overspend in Children’s and ASC however, it was not certain if all causes were the same. Nick Carter felt assured that lessons learned would be used when setting the budget for the next financial year.

Resolved that:

1)    Andy Walker to provide a response on the discrepancy between the two new revenue budget figures.

2)    A written response be requested from the Highways Department regarding why the car parking target had not been achieved.

3)    A response regarding grass cutting be sought from Paul Hendry and the Countryside Team.

4)    Andy Walker to provide costings for the SWEP in November.

5)    The Shaw House team to be challenged on why the income target was not being met and what the plan was for turning the situation around. 

Councillor Emma Webster closed the meeting by stating that, as of the December 2018 Council meeting, she would be stepping down as the OSMC Chairman. She thanked Members and Officers for their input into scrutiny meetings during her time in the Chair.