Agenda item

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

4.1       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 2019 and providing explanations of the major variances identified between projected outturn expenditure/income and the current approved budget. The report explained that the last revenue monitoring report, approved by the Executive Committee on the 20August, noted the significant risks associated with Health & Social Care in delivering a balanced outturn position for 2019/20.  Since the last report Corporate Management Team (CMT) had assessed updated financial projections for H&SC. Information prepared with the department indicated significant underlying pressures of £2.518m in excess of budget remain.  Those pressures, if not contained, would result in a year end overspend for the Council.  Consequently, CMT had developed a series of budget measures designed to bring the revenue account back into balance by 31 March 2020.  If those actions were not successful however, or if further unfunded issues emerged, those pressures would result in a year end overspend.  The report further explained that the measures identified included settlement of the Scottish Wide Area Network (SWAN) dispute (£0.840m), a further transfer of resources from the Integration Joint Board (IJB) (£0.925m) and a range of actions, highlighted in section 3 to the report, to deliver underspends in other services (£0.753m) to help offset adverse variances projected in Health and Social Care.  Taken together those measures allowed a forecast balanced outturn position at 31 March 2020 to be reported for the Council.  As the year progressed further pressures were likely to emerge and in anticipation CMT had now instructed a freeze on discretionary expenditure, including managed delays in recruitment to non-frontline posts.  Finance staff 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.  Further progress had been made in engaging and training of managers, work continued across the Council to ensure ownership of the budget by managers, their full engagement in the monitoring process and the robustness and accuracy of projections.

4.2       The report also explained that good progress was being made in the delivery of savings in the current year as shown in Appendix 4.  As at 30 September 2019, 62% (£8.176m) of the savings required by the approved budget had been delivered within the current year.  A further 22% (£2.827m) was profiled to be delivered during the remainder of 2019/20 with the remaining 17% (£2.260m) having 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 had been found.  This was particularly important given the scale of the full year savings required (£13.263m), 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.  Mr Robertson explained that 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 this report.  In response to Members questions, Mr Robertson explained that the pressures in Health and Social Care had arisen through the non-delivery of savings, reduced income from charging and the costs of additional care packages.  The service would have a greater focus on budgetary control, improved management of the recovery of income due from clients and measurements would be in place to ensure that additional care packages were not agreed without a source of funding being identified.  Mr Robertson also assured Members that were no concerns with regard to the SWAN contract where a settlement had been reached to compensate for late delivery of services.  He further advised that, if there was a risk of further cost pressures emerging as the year progressed or that the savings required to compensate for non-delivery of financial plan savings might not be achieved this would impact on the outturn position.  He added 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 but remained concerned regarding IJB funding.

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 30 September 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 balanced position projected was dependent upon £925,000 being provided by the IJB to support additional costs of care packages being experienced in the current year and instructed the Chief Officer IJB to address this matter through the Integration Joint Board; and

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