Agenda item

(1)       Mr Brazier said that currently the revenue budget was showing an underspend of some £2.4m after management action and excluding Asylum costs.  Expenditure on the Capital Programme was continuing to move forward and overall given the circumstances, he felt the budget was in a satisfactory position.  With regard to Asylum, a letter had been received from the Home Office which confirmed that it would meet in full the shortfall of £2.1m for 2007/08 subject to a final audit.  This together with the £2.4m for 2006/07 confirmed by the Home Office in September this year meant that the County Council had agreement that the Home Office would fund the full £4.5m of its special circumstances bids leaving an anticipated £1.5m to come from the DCSF.  The Department still has to agree final client number so this issue remained outstanding but if the full £1,5m was secured (of the original claim for £2.6m) then the County Council would have reached the £6m, of the £10m originally claimed and this was as per the agreement reached with the LGA in the Summer.

(2)       Lynda McMullan said that in the forthcoming budget build there would be three key areas which the County Council would need to look at and those were transport demographics, the budget for Adult Kent Social Services and the budget relating to Child Social Services.  Two key budget risks remained, one of these which was Asylum but as detailed in the previous paragraph, the Government had promised the County Council would not be out of pocket for this year.  The other key budget risk related to the funds which the County Council had in Icelandic Banks.  As a result of these investments, the interest on these deposits would not be received as expected resulting in a potential loss on income.  This however, needed to be considered in the light of the whole Treasury Management Budget which was impacted by recent and predicted changes in the bank base rate.  The County Council was continuing to have ongoing discussions with both the CLG and the Icelandic Banks via the Creditors Group to ensure that the County Council secured the best outcome for the residents of Kent.  Until the situation became clearer, the impact of this and not so far been reflected in the forecast outturn position of this report, but the County Council remained confident that it would eventually have its investments back returned.

(3)       In concluding discussion, Mr Carter said that he was pleased to note the good progress which was being made in relation to both the revenue and capital budgets and welcomed the update on the position with the County Council’s investments in Icelandic Banks.  He expressed concern regarding Asylum and the number of referrals which appeared to be increasing and said that this was something which the County Council would need to monitor closely.

(4)       Cabinet then noted the latest monitoring position on the revenue and capital budgets and the additional revenue grant income as identified in Appendix 2 of the Cabinet report, together with the changes to the capital programme.