Agenda item

(1)       Mr Chard introduced the first exception report for 2008-09, which identified a number of significant pressures that will need to be managed during the year if the Council was to achieve a balanced revenue position by the year end.  It was noted that, as this was the first exception report of the new financial year, it was usual to report a projected overspend but this was before any management action had been agreed.  He reassured the Cabinet, however, that the Council’s revenue budget had underspent in each of the last eight years and he was confident that the current year’s budget would also not overspend.

(2)       Mr Chard referred to the summary table of the forecast revenue pressures, excluding schools, shown in Table 1 on page 1 and 2 of the report.  He reported that the projected forecast variance was +£6.762m (excluding asylum) and +£11.762m (including asylum).

(3)       Mr Chard spoke briefly about the cost pressures being faced by the Council with regard to the current economic conditions and stated that a detailed paper was being prepared for consideration at an extraordinary Cabinet meeting on 4 August.  It was noted that the paper was likely to recommend sensible management of the additional costs over a three year period, rather than risking an impact on the quality of service delivery if these additional pressures were contained in a single financial year.

(4)       With regard to the position on the Capital Programme, Mr Chard assured the Cabinet that, in the current economic climate, the level of capital receipts due to be realised in the current financial year might not reach the projected level necessary to fund all of the planned projects in 2008/09 and that this situation was being monitored closely and options for dealing with a likely lower level capital receipts were being considered.

(5)       Finally, Mr Chard commended the recommendations to the Cabinet set out in paragraph 6.2 and 6.3 of the report.  He assured the Cabinet that the proposed virement and base adjustment within the Children, Families and Educational Achievement Portfolio would not have an adverse effect on the amount of money spent on grants.

(6)       Mr Carter stated that he was eager to see the proposed management action referred to by Mr Chard to enable the revenue budget to be brought back on target.  He added that, in the current economic conditions, the Council had an even greater duty to maintain sound financial management and to deliver the lowest possible Council Tax next year.  Mr Carter also stated that a number of meetings were currently being held within KCC to consider the impact of increased costs in a number of areas and an agreement would be reached on how to reshape the Council’s priorities accordingly.

(7)       Finally, Mr Carter stated that negotiations with the Home Office about the costs of dealing with the impact of asylum were proceeding well.  It was noted that, whilst Mr Carter could not give details at this stage, there appeared to be an acceptable solution on the table with regard to the Council’s historic debt on asylum and the true costs of asylum going forward from this year.  Mr Carter stated that he hoped to be able to make a more detailed announcement shortly.

(8)       Cabinet agreed to:-

(a)       note the initial forecast revenue and capital budget monitoring position for 2008/09, and the potential impact of the inflationary pressures on the current and future years budgets;

(b)       agree the revenue virement and base adjustment of £1.863m within the Children, Families and Educational Achievement Portfolio as detailed in Section 2.1.3 of the report;  it being noted that the grants to voluntary organisations budget had historically underspent with the saving being used to offset pressures elsewhere within the Children’s Social Services, therefore this adjustment would not affect the historic level of expenditure on grants to voluntary organisations but would simply correct a base budget imbalance; and

(c)        agree that the remaining £5.111m of uncommitted 2007/08 revenue budget roll forward be set aside as a contingency against the current economic climate.