Agenda item

Mr P Oakford (Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services) was in attendance for this item and Mrs C Head (Head of Finance Operations) was in attendance virtually for this item.

1.    Mr Oakford introduced the Revenue and Capital Budget Monitoring Report to September 2022, which had been presented to Cabinet on 1 December and was the second for the 2022/23 financial year. The Committee were informed that the report projected a £60.9m in-year overspend, which represented a £10.3m increase from the previously reported projection. He warned that it was a serious cause for concern and required significant management action to minimise spend as far as possible, to ensure that the authority was as close to a balanced budget as possible by the end of the financial year. The main reasons for the projected overspend were detailed with inflationary, demand pressures and non-delivery of some agreed savings cited. Adult Social Care and Children, Young People and Education were highlighted as the directorates with the majority of the projected overspend, at £27.7m and £33.9m respectively. He explained that whilst the £25m risk reserve was designed to address overspend, that additional overspend would need to be met from the authority’s general reserve. Members were informed that £35m of the £51m savings target were anticipated to be realised by the end of the financial year. Regarding the capital budget, he confirmed that a £74.6m underspend, with £103.7m rephrased and an in-year overspend of £29.1m, had been forecast. Concerning the projected deficit on the High Needs budget, he advised that it was expected to increase by £46m in 2022/23 to £147m, up from £101m at the end of 2021/22. He concluded by alerting Members that the report reflected the most challenging projection that the Council had seen in recent years and that difficult decisions would need to be taken to reduce the projected overspend and impact on the medium-term financial plan.

2.    A Member asked whether the mainstream home to school transport budget included both pupils with KCC funded bus passes, as well as those provided with hired vehicle transport, if a breakdown of the total mainstream home to school transport spend across both categories could be confirmed. Ms Head agreed to provide Members with the requested information following the meeting.

3.    Following a request from a Member for more information on the reasons for the projected capital budget underspend, Mrs Head explained that rephasing projects to future years as well as slippage were the main reasons for the underspend. Mr Oakford confirmed that the reasons for rephasing and overspends were tracked.

4.    In response to a question from a Member on what overspend was expected by the end of the financial year, Mr Oakford stated that the target was to reduce the overspend to below £25m, in order that it could be covered by the risk reserve.

5.    A Member asked whether section 12 of the report was the only governance document for in-year spend and changes. Mr Watts agreed to follow up the question with the Corporate Director for Finance and provide Members with an answer following the meeting.

6.    Mr Oakford informed Members, following a question from a Member on whether the projected savings for SEN assessments were realistic, that the resourcing of assessments were the subject of ongoing discussions with the Cabinet Member and Corporate Director as part of the budget setting process.

7.    Concerning the provision of home to school transport, the Chairman stated that he hoped officers were proactive in reducing costs, where possible, without reducing service quality. He emphasised the need to analyse the reasons for costs increases, to understand whether inflation or unreasonable increases had been the drivers for increased service costs. Mr Oakford explained that the home to school transport market had experienced higher demand and a lower supply of drivers and providers, which had caused cost increases, he reassured the Committee that officers were investigating the matter closely. He added that the retender of home to school transport had reduced service costs, but increased demand had created the projected overspend.

8.    Mrs Bell confirmed, following a question from a Member, that the difference in costs between framework and non-framework beds was differed between contracts. She confirmed that alternative models of care were being investigated to further increase service capacity and reduce costs. Mr Oakford reassured Members that Cabinet drilled down into the reasons for cost increases, with care home beds a prime example. He added that keeping providers afloat, in order to maintain local supply, was an important factor and that homes needed at least 80 beds to be financially viable, with over 80% in Kent below that level.

9.    In response to a question from a Member, Mr Oakford explained that, aside from highway and school capital projects, most other projects had been pushed back to reduce the impact of inflation.

10. A Member asked whether council tax collection rates could be improved to increase the authority’s revenue. Mr Oakford confirmed that KCC financially incentivised district councils to improve their collection rates.

11. A Member commented that a strict commercial approach to contracts was required and that the use of local providers should be maximised.

12.  Mr Oakford confirmed, in response to a question from a Member on reducing service levels to improve the Council’s financial position, that service costs and outcomes were being examined as part of the budget setting process. He added that financial and statutory service resilience were priorities.

13. A Member asked for confirmation of the High Needs deficit, how the deficit would be repaid and what it would stand at the end of the 5-year period. Mr Oakford explained that KCC were in ongoing negotiations with the Department for Education as part of their Safety Valve Programme and that further detail could not be provided in open session at that moment. Mrs Head confirmed that £147m was the projected accumulative deficit for the end of the financial year.

14. Mr Rayner moved and Dr Sullivan a motion “that the meeting be taken into closed session.”

15. Members discussed the motion and how best to consider confidential information relating to the High Needs deficit, including the merits of delaying consideration of the issue to January, in order that further information and the appropriate officers can attend the Committee.

16. Dr Sullivan withdrew her second. The motion was lost.

17. The Chairman moved a motion “to defer consideration of the Revenue and Capital Budget Monitoring Report to a future meeting of the Scrutiny Committee.”

18. Members voted on the motion. The motion passed by majority vote.

RESOLVED to defer consideration of the Revenue and Capital Budget Monitoring Report to a future meeting of the Scrutiny Committee.