Agenda item

Consider report by the Executive Director of Finance and Regulatory Services providing budgetary control statements for the Council’s General Fund.  (Copy attached).

3.1       There had been circulated copies of a report by the Executive Director Finance and Regulatory providing the budgetary control statements for the Council’s General Fund based on actual expenditure and income to 31 December 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 third quarter of 2019/20, the Council was projecting a balanced position with significant budget pressures, primarily from delays in delivery of financial plan savings, being addressed from one-off underspends elsewhere in the Council.  In total, budget pressures of £1.8m were being offset from a successful Non Domestic Rates appeal generating a one-off benefit of £0.670m, an underspend in Loans Charges as a result of tactical borrowing decisions of £0.844m and a range of service underspends across the Council as a result of the Corporate Management Team (CMT) instruction to implement a freeze on discretionary spend.  Total budget pressures within Health & Social Care (H&SC) which had required support from other areas of the Council and additional support from the Integration Joint Board (IJB).  In total, the H&SC budget had required additional support of £3.1m beyond the approved budget.  The Executive Director Finance and Regulatory, Mr Robertson reminded Members that the Integration Joint Board overspent their budget by a similar figure in 2018/19 which was addressed through the financial planning process for 2019/20 and the level of expenditure being incurred by H&SC was unsustainable.  Finance staff had continued to support managers in their forecasting responsibilities with month-end forecasting tools being automatically emailed out to all budget managers directly from Business World.  Whilst further progress had been made in engaging and training of managers over the last quarter, there were still a number of areas where further work was still required to ensure universal ownership of the budget by managers, their full engagement in the monitoring process and the robustness and accuracy of projections.

3.2       The report also explained that savings had been made as shown in Appendix 4 to the report.  As at 31 December 2019, 69% (£9.116m) of the savings required by the approved budget had been delivered permanently within the current year.  A further 2% (£0.289m) was profiled to be delivered during the remainder of 2019/20, with the remaining 29% (£3.858m) having temporary in-year mitigations to deliver alternative savings.  Emphasis during the remainder of 2019/20 needed to be placed on ensuring those savings were delivered permanently in 2020/21.  This was particularly important due to the requirement to deliver ambitious savings plans in future financial years within the Financial Plan.  Mr Robertson explained that full details of the 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.

3.3       After the third quarter of 2019/20 the projected balanced position with significant budget pressures, primarily from delayed delivery of financial plan savings, were being addressed from one-off underspends elsewhere in the Council.  The failure to control expenditure within the approved budget levels during 2019/20 within H&SC had destabilised the financial position of the Council, reducing resources to be spent on other key service areas hampered the ability to invest in key services developments which would modernise Council services.  The continued overspend in the H&SC budget delegated from the IJB was not sustainable.  Mr Robertson explained that consideration of the permanent effects of both increases in service delivery of the current scale within H&SC and non-delivery of savings across the Council must be considered as part of the 2020/21 financial planning process to ensure the budget was as robust as possible.  Permanent delivery of savings remained the key financial challenge facing the Council and a key requirement to ensure the Council could operate a sustainable budget.  Full details of the 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 this report.

3.4       Mr Robertson responded to Members’ questions relating to the successful non domestic rate appeal, concerns regarding the Planning Service forecast of a £400k pressure within the planning fee income due to a drop in application numbers and better future planning for the funding of health and social care.  In response to a comment regarding the lack of savings from recycling it was suggested that this could be considered by the Sustainable Development Committee.  The virements contained in Appendices 2 and 3 were discussed and Mr Robertson emphasised that every effort would continue to be made by Service Directors to contain projected spend in the remainder of the year and identified savings were delivered permanently to ensure affordability and budget sustainability.  Members noted the position.

DECISION

(a)       AGREED:-

(i)     the virements as detailed in Appendices 2 and 3 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 31 December 2019, the pressures identified, the underlying cost drivers of this position and the identified areas of financial risk as reflected in Appendix 1; and

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