Agenda item

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

Resolved to note:

·         the year-end forecast under spend of £0.3m. The year-end forecast is after taking account of provision that was made in reserves for specific risks at the time of budget setting. Without this provision, the forecast would be an over spend of £0.5m.

·         the ongoing impact that Covid will have on the 2021/22 budget as the Council sees increased demand for some services, but continues to be supported by external funding. 

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 financial performance of the Council’s revenue budgets and which provided a year-end forecast.

There was a predicted underspend at year end of £0.3m taking into account under and over spends across the Directorates. In the People Directorate, there was a forecast overspend of £59,000 after the use of Government Covid-19 funding and service specific risk reserves which were allocated to the Adult Social Care and Children and Families Services budget in March 2021 which recognised the increased volatility, inherent in the ASC modelling in particular, as a result of the pandemic. In the Place Directorate, additional staffing costs were forecast reflecting pressures relating to the Local Plan and ecological assessments contributing towards a forecast over spend of £0.2m.

In the Resources Directorate there was a forecast overspend of £0.4m arising from less income than expected due to a number of schools leaving the Council insurance service in favour of cheaper Risk Protection Arrangements offered by the Department for Education and also additional temporary staff costs in the Finance Service. However, Capital Financing forecast a £1m underspend due to more efficient treasury management and more judicious use of lower interest rates and short-term borrowing.

In summary, the revenue budget was forecast to be underspent by just 0.2% which reflected the continued strong and robust financial management of the Council.

Councillor Lynne Doherty said the report highlighted the difficult circumstances the Council was still in with regard to the effects of Covid-19 as well as the uncertainty of funding going forward. Councillor Doherty thanked the Finance team for their excellent work in these uncertain times which were likely to remain for the remainder of the financial year. Councillor Doherty was disappointed to note from the report that the overspend in Children and Family Services was due to partners choosing not to contribute into the Family Safeguarding Model which was felt to be rather short-sighted given the impact on children and young people in the district.

Councillor Lee Dillon raised a concern over the use of risk reserves at this stage of the financial year and queried if those risk reserves were robust or would there be a call on general reserves to top up risk reserves at Q2? Councillor Ross Mackinnon said he felt the risk reserves were robust and could be relied upon, although it was generally recognised that any forecast or model might not prove to be accurate at the end of this financial year. With regard to reserves usage, Councillor Mackinnon pointed out that Covid-19 had hugely increased the volatility into that model and this had been recognised in the budget.

Councillor Carolyne Culver referred to paragraph 4.3 of the report which noted a spend of £0.5m in the Chief Executive’s Office and queried what this spending activity related to. Councillor Mackinnon said the Chief Executive’s Office was an administrative and back-office function but did not have the detail for the spend and would endeavour to answer this query as soon as possible.

Councillor Erik Pattenden sought clarification on the overall loss of £100,000 caused by what looked like the Department for Education undermining the Council and offering an alternate source of insurance. Councillor Mackinnon said this was not the case but thanked Councillor Pattenden for pointing it out.

With regard to partner agencies not currently contributing to the Family Safeguarding Model, Councillor Pattenden asked whether there was a risk to that service being cut if partner agencies continued not to contribute. Councillor Dominic Boeck said it was extremely disappointing that the CCG and Thames Valley Police had not seen fit to replicate the commitment to funding this model as they had done in earlier years and which they had been encouraged to continue to do so by both Members and Officers. Nevertheless, Councillor Boeck felt there was no risk to the service and all efforts would be made to continue with the service as it had become part of the culture in West Berkshire.

Councillor Adrian Abbs said the report mentioned the natural carbon reduction methods project and asked for clarification as to what this related to. Councillor Steve Ardagh-Walter was unable to advise at the present time but would look into it and report back.

Councillor Alan Macro noted in the report that Long Term Services were overspent by £2.1m due to higher client numbers than modelled – 1,734 vs 1,689 – and asked whether the latter was the original model number or whether the number had been adjusted as a result of Covid-19. Councillor Jo Stewart said that as far as she was aware the figure of 1,689 was the original model number. The model was one of those conversations that appeared every quarter and took place with Finance Officers who helped to build the model along with information and expertise provided by the Adult Social Care team and Commissioning team. The model was built on known data, i.e. things that had actually happened, and then expected to predict what would happen. If the situation then changed substantially, it could appear that the model was incorrect even though it had relied on known data. The report showed the model numbers as well as a forecast line and Councillor Stewart suggested that it was the forecast line that should be worked with as that was based on actual numbers and she had asked the Finance and Adult Social Care teams to work out how the model could be tested if numbers did not appear to match what was happening in reality. Councillor Stewart said the strategy for care homes was also being looked at as there were some clients with complex needs which the Council’s own care homes were unable to meet, necessitating a need to approach the external market. This review might lead to an expansion in the Council's care home provision or a change in the services provided which would involve a consultation with the public, though there was no timeframe for this currently. 

Councillor Mackinnon said from a budgetary perspective of the model, it should be recognised that the volatility relating to Covid-19 had hugely increased and prudent measures had been put in place to deal with it to the Council’s credit. Councillor McKinnon thought it was fair to point out that by their very nature models would never be 100% accurate and were therefore subject to regular update. Councillor Dillon suggested that in terms of the modelling review Councillor Stewart had referred to, there might be merit in benchmarking against other Councils modelling to see how accurate their modelling was compared to West Berkshire’s and whether the LGA could offer any support.

RESOLVED to note:

·         the year-end forecast of £0.3m under spend. The year-end forecast took account of provision that was made in reserves for specific risks at the time of budget setting. Without this provision, the forecast would be an over spend of £0.5m.

·         the ongoing impact that Covid-19 would have on the 2021/22 budget as the Council saw increased demand for some services, but continued to be supported by external funding.

Other options considered: None.