Agenda item

John Betts ( Interim Corporate Director Finance) Cath Head (Head of Finance Operations) and Joe McKay (Acting Chief Accountant) were in attendance for this item.

1.    Mr Oakford (Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services) introduced the report which set out the revenue and capital budget monitoring position as at September 2024-25 (Quarter 2). The forecast revenue outturn position was an overspend of +£26.8m (excluding schools), which represented 1.9% of the revenue budget. The forecast outturn position had increased by £10.5m compared with the forecast position in June 2024-25 (Quarter 1). The largest overspend was within Adult Social Care & Health (+£32.5m), of which £22.7m related to savings which could not be delivered in year, but the majority of which would be delivered in future years. The remaining £9.8m of the overspend related to other service-related pressures, largely driven by the increase in the cost (both complexity and inflationary) to deliver social care placements from providers. Similar challenges were faced by other upper-tier local authorities with 81% reported to be on course to overspend on their adult social care budget in the current financial year. Work would continue within the ASCH directorate to reduce the forecast overspend as far as possible. Panels remained in place to ensure that social care need was being met in the most cost effective manner and this was reviewed by senior management. There were three particular workstreams in train with external consultants who were working closely with Adult Social Care and Health front line staff to identify more effective working to deliver cashable savings and reduce the forecast overspend trajectory for 2024-25. Non-delivery of savings would have a significant impact on the future year's budget. Any overspend was a concern for the authority and presented a risk for the Council's future financial sustainability. It was critical that the overspend for the Council was managed down to as near a balanced position as possible, as any overspend weakened the Council’s financial sustainability going forward. Reserves were a one-off solution; however, they continued to be used without the ability to replenish them. The capital programme spent to date was £123.3m, representing 28.9 % of the total approved budget. The directorates were projecting a £90m underspend against budget for the full year. This was split between a £14.4m real variance and £104m of rephasing. Of the rephasing, £41m was prudential borrowing funding, with the remainder funded from grant or external funding. Mr Oakford commented on those areas where there were underspends, primarily those reported within the Children, Young People & Education Department, and gave recognition to the work undertaken to not only reduce the spend but deliver savings.

2.    The Leader noted the significant reduction in pressures compared to the financial position for 2023-2024 which was as a result of tremendous areas of progress, as evidenced within the SEND reforms. However, the savings which were due to be met within the Adult Social Care and Health remained a significant pressure for both Kent County Council and the sector as a whole and every effort would be made to help reduce those pressures. Difficult decisions would continue to be taken to contain budgetary tensions at a time when reserves were low and which also needed to be replenished.

3.    Further to comments and questions from Members it was noted:

·         That until Government recognised the need for reform or structural change to address the financial pressures, the issues would continue.

·         Whilst there were many aspects not within the Local Authority’s direct control, it was important to retain sight of those areas that were, with particular emphasis on SEND whereby an improved quality of service had been achieved through the Council’s own initiatives, and savings had also been delivered. Thanks were offered to all staff involved in helping to deliver the SEND reforms as this ensured funding could be better utilised in the future for those who needed it most. The quality of service was dependent on the finance available in order to sustain it.

·         Tribute was paid to staff within the Children’s, Young People and Education Directorate for the significant amount of work undertaken to deliver the projected savings and remain within budget. In particular, the high degree of support provided to families which in turn had helped to reduce the number of children in care, and thereby reduced budgetary pressures. However, an area which continued to create financial challenge was the residential and semi-independent placements for children. Whilst significant work had been done to ensure relevant contributions were received for the 18-25 cohort (which would positively impact on the Adults budget going forward), the cost of care for Looked After Children continued to rise despite all efforts to reduce this.

·         Work continued to reduce the pressure within the Adult Social Care Directorate. Of the £54m savings programme, £32m was projected to be met with £22m still outstanding. A majority of those savings were set to be delivered in the 2025-26 financial budget. Reasons for delay included challenges attributed to partnership working and conflicting financial priorities

. 4. RESOLVED That Cabinet:

(a)  NOTE the forecast revenue overspend of £26.8m (excluding Schools) and the actions being taken to mitigate the forecast overspend

(b)  NOTE the forecast overspend on Schools’ Delegated Budgets of £29.1m.

(c)  NOTE the forecast capital underspend of £90.1m.

(d)  NOTE the progress on the delivery of savings.

(e)  AGREE the Capital budget changes.

(f)   NOTE the Reserves, Treasury Management and Prudential Indicators monitoring