Agenda item

Consider report by the Chief Financial Officer providing budgetary control statements for the Council’s General Fund.  (Copy attached).

There had been circulated copies of a report by the Chief Financial Officer providing the budgetary control statements for the Council’s General Fund based on actual expenditure and income to 30 September 2018 and providing explanations of the major variances between projected outturn expenditure/income and the current approved budget.  The report explained that the Council was experiencing significant financial pressures, primarily in Assets and Infrastructure and Health and Social Care, attributed to increased costs and delayed delivery of planned savings in the revenue budget.  The underlying pressure in the account indicated that the pressures would result in an adverse variance at the year-end of around £3m. The Corporate Management Team had reviewed the position and had taken action through a range of alternative measures to identify savings which, if delivered, would offset the position and deliver a balanced budget by 31 March 2019.  The Chief Financial Officer, Mr Robertson noted it was increasingly evident that the Council was finding it more and more difficult to balance the revenue budget given the sustained service demands e.g. in Adult Social Care.  It was essential to ensure the financial sustainability of the Council that the revenue budget was balanced and that this was achieved through the delivery of permanent savings in line with the timescales approved in the financial plan.  As shown in Appendix 4 of the report as at 30 September 2018, 89% (£14.63m) of the £16.4m of savings required by the financial plan had been delivered within the current year.  A further 11% (£1.784m) was profiled to be delivered during the remainder of 2018/19.  Emphasis during 2018/19 needed to be placed on delivering the savings permanently as planned.  The monitoring process demonstrated that in the current year over £7.5m of required savings had been delivered on a temporary non recurrent basis to compensate for delays in project delivery and revisions to savings which were originally envisaged in the 2018/19 financial plan.  The Chief Financial Officer noted that this position was not sustainable and must be addressed as part of the 2019/20 financial planning process on a permanent basis. The full details of pressures, risks and challenges and the significant majority of the areas of the Council’s operation where budget plans remained on track were detailed in Appendix 1 to the report.  In response to a concern on the pressures of £1.2m in Assets & Infrastructure and the need for more detailed information required, the Chief Financial Officer reported that a more detailed indication on the position of Assets & Infrastructure was included in Appendix 4 of the report.  There had also been a concern raised on the challenges faced in trying to balance the Health and Social Care budget.  The Chief Executive responded highlighting the degree of complexity required to keep more people at home and referred to investment in dementia care and housing for the elderly.  There was also a concern on the risk of moving budgets around and there appeared to be a lot of temporary savings with an ongoing trend being a particular threat.  The Chief Executive reported that there would not be an adverse variance at the year end and measures would be taken to manage the budget.  In response to a question regarding fleet management, the Chief Executive reported that a new member of staff had been appointed to address the issue of fleet management across the whole Council.  With regard to the transfer of the SB Cares Bordercare Alarms, Mr Barr reported that the transfer had been a success and the savings would be delivered on a permanent basis by the end of April 2019.  A concern was raised over the budget transfer from housing benefit to fund digital transformation.  Mr Robertson explained that surplus funding had been identified which could be used to support digital transformation and no one entitled to housing benefit would lose out as a result of this management action.  It was proposed that recommendation (c) be amended to read “note the progress made and the risks involved in achieving Financial Plan savings shown in Appendix 4 to the report”:  It was also agreed to add the following recommendation: request that a report would be brought to the Budget Working Group highlighting savings that had only been delivered on a temporary basis in the budget and the risks associated with these.

DECISION

AGREED to:-

(a)       note the projected corporate monitoring position reported at 30 September 2018, the underlying cost drivers of this position and the identified areas of financial risk including the position reflected in Appendix 1 to the report;

(b)       approve the virements attached as Appendix 2 & 3 to the report;

(c)       note the progress made and the risks involved in achieving Financial Plan savings shown in Appendix 4 to the report;

(d)       note the Corporate Management team directive to ensure all  managers operate within revised budgets for the remainder of the financial year therefore ensuring a balanced outturn position is delivered in 2018/19; and

(e)       request that a report would be brought to the Budget Working Group highlighting savings that had only been delivered on a temporary basis in the budget and the risks associated with these.