Agenda item

Consider report by the Chief Financial Officer providing budgetary control statements for the Council’s General Fund based on actual expenditure and income to 30 June 2015.  (Copy attached.)

There had been circulated copies of a report by the Chief Financial Officer providing budgetary control statements for the Council’s General Fund based on actual expenditure and income to 30 June 2015 together with explanations of the major variances between projected outturn expenditure/income and the current approved budget.  The revenue monitoring position set out in the report was based on actual income and expenditure to 30 June 2015.  The position reported assumed significant pressures highlighted in the remainder of the report would be managed within existing departmental budgets. Failure to manage these identified pressures would result in a significant budget shortfall in the Council.  The management team was progressing with the programme to modernise and transform the Council, and identified corrective action where budgets were diverting from plan and had confidence that pressures would be managed and that a balanced out turn would be delivered. Pressures evident at month 3 included out of area children’s placements, a higher than anticipated level of placements for Older People in Residential Care, and care packages for people with Physical Disabilities Community-Based services.  Action was being taken by the People department to contain these pressures.  At 30 June, 50% (£3.829m) of planned efficiency savings had been delivered as per the Financial Plan, with a further 44% (£3.406m) profiled to be delivered over the remainder of the financial year.  Of the remaining 6%, £40K had been achieved by alternative, permanent measures and £158k temporarily.  A further £228k remained profiled to be achieved by alternative means.  Paragraph 3.3 of the report also highlighted two unbudgeted pressures which had the first results from management action taken early in the year to preserve service provision to vulnerable adults, delivered through two additional care home contracts that were now being provided in house following decisions out-with the Council’s control by care providers to hand back these contracts.  A further area of additional cost was anticipated from changes in night time support legislation.  Taken together, these cost pressures were anticipated to total £0.307m and they would require a tactical draw-down from reserves in year.  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 Chief Financial Officer advised of a correction to the recommendation at paragraph 2.1(e) in the report which referred to Appendix 1 and should have referred to Appendices 2 and 3.  In the discussion which followed Members commented on the number of out of authority foster care and complex needs placements.  The Depute Chief Executive People spoke of the challenges of out of authority placements, with foster care costs out-with the area being double.  A review of foster care in the Borders was underway and officers were currently speaking to families, reviewing costs and payments, and looking at marketing foster care.  Facilities being developed at Duns, Earlston and Langlee would address the issue of keeping children within their own communities in the Borders.  A request was made that a report by the Depute Chief Executive Place giving an update and clarifications on out of area placements and foster care be brought to a future meeting of the Executive Committee for consideration in private and this was unanimously accepted.  Members also highlighted the potential impact of staff transferring in to SB Cares following the termination of 2 major homecare contracts; the Neighbourhood action plan; and recharges to the non-General Funds.   It was further noted that the graphs appended to the report may not have been updated and the Chief Financial Officer undertook to check these and reissue them if necessary.

DECISION

AGREED:-

(a)        to note  the projected corporate monitoring position reported at 30 June 2015, the underlying cost drivers of this position and the identified areas of financial risk;

(b)       that the Depute Chief Executives for People and Place and their Service Directors would continue to work with their management teams to ensure a balanced budget position was delivered 2015/16;

(c)        the action set out in paragraph 3.4 of the report to realign the  budgeted contribution from SB contracts to the general fund;

(d)       to approve a drawdown from unallocated reserves of £0.307m to corporately fund the newly emerged pressures identified in paragraph 3.5;

(e)        to approve the virements set out in Appendices 2 and 3 of the report;

(f)        to note that the Corporate Management Team would develop proposals to permanently address budget pressures as part of the 2016/17 Financial Planning process; and

(g)       that a report by the Depute Chief Executive People giving an update and clarifications on out of area placements and foster care would be considered in private at a future meeting of the Executive Committee.