Agenda item

Consider report by the Chief Financial Officer providing an analysis of the Council’s balances as at 31 March 2019 and of the projected balances at 31 March 2020.  (Copy attached.)

4.         MONITORING OF THE GENERAL FUND REVENUE BUDGET 2019/20

            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 June 2019 and providing explanations of the major variances identified between projected outturn expenditure/income and the current approved budget.  The report explained that after the first quarter of 2019/20 the Council was projecting a balanced outurn position whilst acknowledging significant financial risk of over £0.7m specifically within the Joint Learning Disability Service in H&SC.  The Service was focusing on urgent management action on containing expenditure within budget and maximising income wherever possible.  An updated position would be presented to the Executive Committee with the second quarter financial reporting papers.  In addition, there were a number of further areas of risk and emerging pressures which had been identified that require ongoing management.  The report further explained that the revenue monitoring process had been redeveloped over the first quarter 2019/20 in line with rolling out new reporting and forecasting functionality within Business World.  The month 3 monitoring report represented the second cycle in which month-end forecasting tools were automatically emailed out to all budget managers directly from Business World.  Whilst further progress had been made in engaging and training of managers, there were a number of areas where further work was still required to ensure universal ownership and engagement in the monitoring process and the robustness and accuracy of projections.  Continuing to make steps forward during the second quarter would mean all managers would complete expenditure and income forecasts for their area of budget responsibility.  Real time financial reporting with drill-down functionality to individual transaction level within Business World was also now available to Budget Managers.  This additional financial information assisted Managers with the process of effective budget management.  Training and support continued to be provided by Financial Services staff.    As shown in Appendix 4, as at 30 June 2019 47% (£6.426m) of the savings required by the approved budget had been delivered within the current year.  A further 46% (£6.156m) was profiled to be delivered during the remainder of 2019/20 and the remaining 7% (£0.982m) had temporary in-year mitigations to deliver alternative savings.  Emphasis during the remainder of 2019/20 needed to be placed on delivering all outstanding savings permanently per the 2019/20 Financial Plan, including those for which only temporary solutions have been found. This was particularly important given the scale of the full year savings required (£13.564m), including those brought forward from 2018/19 requiring permanent solutions and the requirement to deliver ambitious savings plans in future financial years within the Financial Plan.   Full details of pressures, risks and challenges and the significant majority of areas of the Council’s operation where budget plans remained on track were detailed in Appendix 1 to the report.  The Health and Social Care function were experiencing pressures in the Joint Learning Disability budget which, if remedial action was to be taken, would result in expenditure exceeding budget by £0.7m.  The service had identified financial risks of £0.7m, relating to increased care costs and clients transitioning from Children’s Services (£400k) and income pressures including delays in billing (£300k).  The service was undertaking an urgent review of all projected costs and income including a review of the assessment and billing process with a view to mitigating the risks and ensuring the service could operate within existing budgets.  Members noted the position and expressed concern regarding the funding of health and social care which was only going to become more difficult.

DECISION

(a)       AGREED:-

(i)     the virements as detailed in Appendix 2 to the report; and

(ii)    to continue to actively promote a culture of sound financial; management across the Council, and that budget affordability be fully considered in service delivery decisions in order to ensure the ongoing financial sustainability of the Council.

(b)       NOTED:-

(i)    the projected corporate monitoring position reported at 30 June 2019, the pressures identified, the underlying cost drivers of this position and the identified areas of financial risk as reflected in Appendix 1;

(ii)   the progress made in achieving Financial Plan savings in Appendix 4.