Agenda item

(Item 5 – report by Mr J Simmonds, Cabinet Member for Finance and Business Support and Mr A Wood, Corporate Director of Finance and Procurement)

Cabinet received a report of the above named Member and officer, the purpose of which was to provide the second full financial monitoring report of the 2012-13 financial year.  Mr Simmonds introduced the report to cabinet and in particular referred to the following details contained within it, pertaining to the revenue budget:

• That the main themes within the report were positive and the underspend had risen in value from £5m at the last report to £6m currently
• This figure would be reduced in the future by 1.9 million as big society monies to this value had been set aside for the Kent Youth Employment Scheme and rolled forward on this budget, owing to spending restrictions that meant the money would not be utilised as planned until 2013/14.
• A pressure area, currently valued at approx £5m, was identified within Specialist Children’s Services and lay particularly within the areas of fostering and residential services.  The control measures and early intervention services introduced were beginning to show results but these areas would continue to present challenges for the Council
• A further pressure estimated at £3m was identified in relation to those asylum seekers who were unaccompanied minors or had had ‘Appeal Rights Exhausted’ (ARE).  The report to members assumed the same level of funding from central government as had been received in 2011/2012 but negotiations continued between KCC and the Government.  The County Council was determined that the cost of care for these young people should not be met by the local tax payer and represented its views as such in all negotiations.
• Adult Social Care continued to show an underspend of 2.7m.  Largely accredited to the increased demand nursing care and supported accommodation for older people and domiciliary care and residential care for people with learning disabilities having been offset by  a lower than projected demand for direct payments, day care and older peoples residential care.
• Education, Learning and Skills reported an underspend of £3.6m, partly accredited to the unemployment programme income and the trading and psychology services. In addition Home to School Transport had started to show an underspend after changes to the policy at the start of the school year but the figures were still to be fully analysed.  Any underspend would help to offset spending incurred as a result of the success of the freedom pass.
• Environment, Highways and Waste recorded an underspend in Waste of £1.95m and the annual tonnage sent to landfill had reduced, approximately 720,000 was now forecast against a budgeted figure of 730,000 tonnes. 
• A forecasted shortfall in the Commercial Services contribution was recorded at £1.2m due to additional costs of restructuring and a re-phasing of the increased income target built into the current year budget, now expected to be achieved in 2013-14.
• Finance and Procurement reported savings were a result of the rephrasing of the Capital programme, absorption of cash flow on any new borrowing and the repayment of borrowing as it matured.  There had also been a £690k underspend on the projected spend for settlement of insurance claims; this was partly attributed to the good work undertaken by Highways to make roads and pavements safer.
• Communities reported a small underspend of just under £1m secured through vacancy management control and some delay to the opening of further gateways.

In relation to the Capital budget Mr Simmonds reported the following:

• That there was currently a £9.2m underspend.  This could largely be attributed to the following:
  • That £21m of rephrasing was planned, including the Broadband project currently underway
  • Funding variances of 12.1m
  • The forecasted future overspend on the A28 project [Although this was not money that would be found by the County Council as the project was funded elsewhere, it would continue to show on the budget.
  • 2013/14 would continue to present efficiency and other challenges for the authority.
    
    

The Corporate Director of Finance and Procurement additionally reported in response to comments and questions from the Leader of the County Council, Mr Paul Carter:

• That the £1.12m shift from last month, reported by Mr Simmonds was correct; however this was the first month in which the asylum seekers overspend had been included in the numbers.  This meant that the ‘real’ shift was £4m and the direction of travel continued to be positive.
• That demand levels contained within the report were predicted to remain constant throughout the year with some variance for seasonal demand.  This assumption was based on evidence collected throughout the first six months of reporting.
• Assumptions related to Specialist Children’s Services were also expected to remain constant throughout the year therefore should a reduction be achieved the overspend forecast would be reduced and in the last month since the report had been written this downward pattern had been identified.  
• Following the production of the report, figures had changed slightly in some areas.  There had been a slight increase in the numbers of elderly people requiring care services, but this was not a significant rise.

The Leader of the County Council requested that a full report on the subject of asylum seekers who were unaccompanied minors or who had had ‘All Rights Exhausted’ be produced for consideration at a future meeting of the Cabinet.  This report should detail the issues and ongoing negotiations between KCC and other Local Authorities and Ministers in a way which would allow Members and the public to understand the complex issues at hand and the outcomes towards which the Council was working.

Following a request from the Leader of the County Council the Cabinet Member for Environment Highways and Waste, Mr Bryan Sweetland, reported the following information pertinent to the budget:

• That a decision had been taken to introduce, as a pilot Scheme, charges for road use by private companies known as the Kent Lane Rental Scheme.  The scheme would charge companies who required access to roads such as utility companies, for the time that road use was disrupted for residents. The scheme was not motivated by income generation but rather efficiency of service, however where funds were secured via the scheme they would be ring-fenced for use on further congestion releif measures. 

The Cabinet Member for Specialist Children’s Services, Mr Jenny Whittle further reported on the issues preciously raised relating to the £3m net pressure related to those people seeking asylum who were unaccompanied children or ARE.  She provided a précis of the situation; the Children’s Act required the Council to look after young people who leave care.  These unaccompanied minors fell into that category and KCC was currently supporting one hundred in total.  The Home Office had informed the Council that it need not provide for asylum seekers denied asylum but not removed from Britain, but legal advice was that the council’s statutory responsibilities were relevant in these circumstances.   In effect the Children’s Act was the ultimate legal instrument in this circumstance and therefore the council would be at risk of legal challenge should it ignore it. She agreed that a full report to Cabinet would be useful and timely and informed members that evidence had already provided to the DfE select Committee and Joint Committee of Human Rights on the matter.  The UK Border Agency was not able to cope at present with the number of applications it was processing; action should be taken by the government to address this.

The Leader of the County Council voiced concerns that this continued to go unresolved and hoped ministers would address the difficulties local authorities faced by acting responsibly and quickly.  He reported that KCC had implemented all requests made by the Home Office but, despite this, had received no financial support in return.  He further reiterated that the view of KCC was that the costs of supporting these young people should not be incurred by the council tax payers of Kent

RECORD OF DECISION