Agenda item

To receive the first budget monitoring report for 2017-18

(Item 5 – report of Mr John Simmonds, Cabinet Member for Finance and Andy Wood, Corporate Director of Finance)

Cabinet received a report which reflected the position for each of the Directorates based on the major issues arising from the 2016-17 outturn.

Mr J Simmonds, MBE, Cabinet Member for Finance introduced the report and advised that the early forecast revenue pressure of over £8m was clearly a concern and needed to be managed down. It was not unusual for the first forecast of the year to be on the pessimistic side and for comparison the initial forecast for the same period last year was £7.9m. However it was getting increasingly difficult year on year to balance the budget.

The majority of the £73m of savings were on track. When the 2017/18 budget was set it was planned to increase the General Reserves by £3.9m to reflect the growing risk environment. However since then a number of risks had reduced and it was proposed that the additional £3.9m contribution to the reserves budgeted for in 2017/18 was not now necessary and instead be earmarked for further pot hole repairs across the county, with the remaining £0.9m being declared as an underspend in the current year to partly offset reported pressures elsewhere.

The forecast for Specialist Children Services was showing a budget pressure of £0.3m

The current predicted pressure on the Asylum Service was £4.2m and this was based on a number of assumptions. The 2017-18 Unaccompanied Asylum Seeker Children (UASC) and Care leavers grant rates had not yet been confirmed by the Home Office and therefore it had been assumed that they would continue to be paid at the rates agreed for 2016-17. Discussions were continuing with the Home Office but until there was written agreement from the Home office we were forecasting this pressure.

In relation to Education and Young People, the Education part of the Directorate was forecasting a balanced budget at this stage.  However the Dedicated Schools Grant (DSG) reserve ended the 2016-17 financial year in deficit for the first time and this was now an area of concern for the Council. The main reasons for this were in relation to the higher pupil growth than expected, particularly in relation to pupils with Special Educational Needs.

The authority had agreed with the Schools Funding Forum to retain a reserve of £5m for in year growth. It was noted we now had to meet the costs for students in the age range 19-25 but without any additional DSG funding from Government.

The initial forecast for Adult Social Care and Health Directorate indicated an overall pressure of £3.349m which related wholly to the slippage of some savings in the 2017-18 budget, mainly relating to transformation. It was anticipated that this pressure would reduce over the next few weeks as decisions could be implemented and alternative savings could be found to offset any remaining slippage.

The capital programme 2017-18 had an approved budget of £261.303m (excluding schools and PFI0. This did not yet include roll forwards reported as part of the 2016-17 outturn report but to date there were no known variances to report on.

Mr Andy Wood, Corporate Director of Finance reported that over half of the overspend related to Asylum Service. The UASC grant paid by the Home office reduced once a child turned 16 therefore leading to an increasing pressure as the child got older if the cost of support was not reduced, which was not always possible. The shortfall in the grant rate to support for Care Leavers was not dissimilar to previous years but the overall pressure was greater due to higher numbers of young people.

The overall position was not sustainable and we cannot keep being in this situation at the start of each year. Discussions were ongoing with the Home Office and officers would continue to press for every penny the council was entitled to.

The Leader, Mr P Carter, CBE stated that the Government had a new Minister in charge with Brandon Lewis along with a new team of civil servants. He welcomed the new money that was being put into fixing pot holes across the country during the summer so that repairs could be completed to a high standard by the end of Sept.

Mr Roger Gough , Cabinet Member for Children, Young People and Education reiterated the point about the fall in reserves for DSG. The growth in High Needs pupil numbers was likely to continue into 2017-18 along with other known commitments. The Directorate had embarked on a fundamental review of its DSG High Needs budget with the aim of making amendments to the various processes so that in future the annual commitments could not exceed the annual funding that the council received from the Department for Education. In addition the review was looking to establish a realistic repayment plan so that the reserve returned to a surplus as soon as possible. This review would need to be agreed with the Schools’ Funding Forum in due course.

It was RESOLVED