Agenda item

This report outlines the financial performance of the organisation at the mid-year position, 1^st April to 30^th September 2019.

Cabinet Portfolio Holder: Councillor Peter Butlin

Resolved

That Cabinet:

1.    Notes the forecast underspend of £1.829m for the 2019-20 financial year on the Council’s revenue budget;

2.    Notes the forecast underspend on the capital programme of £12.113m; and

3.    Approves the carry forward of the underspend on the capital programme of (£14.302m) in 2020-21 and future years and the changes totalling £2.189m to the cost and funding of schemes detailed in the report and Annexes A to M.

Councillor Peter Butlin introduced the report. Members’ attention was drawn to the forecast overspend by the Communities Directorate with much of this falling under Education Services. It was however, noted that additional funding has been pledged by central government in recognition that shortfalls in education budgets are a national issue. The underspend in the People Directorate (para 3.2.5) serves to hide a trend of increasing demand for services. The figures presented reflect the timing of the provision of funding rather than offering a true reflection of demand and resource commitment.

Within Corporate Services and Resources (para 3.4.10) the two underspends resulting from additional business rate income and lower capital financing costs were highlighted. It was particularly noted that the lower capital financing costs were the result of slippage in the capital programme and the level of unallocated Capital Investment Fund.

Reserves are forecast to increase to £164.495m. Councillor Butlin emphasised that a third of these are held for specific purposes and cannot be used to support the budget more generally.

Concerning slippage with capital projects Councillor Butlin noted that this is frequently due to factors beyond the control of the County Council.

Councillor Jerry Roodhouse observed that some might regard the County Council’s reserves as excessive at a time when more resources are being sought from central government. Councillor Roodhouse asked if there are any proposals to produce a strategic paper that could be sent back to central government explaining how reserves will be used and offering assurances that there is a plan for them.  Regarding slippage with capital projects Councillor Roodhouse noted that investment by the council in securing the services of the right people could result in more rapid progress being made and corresponding savings being realised. He asked that a briefing paper be produced setting out the benefits or otherwise of such investment in additional staff or skills. In response to Councillor Roodhouse, Councillor Jeff Clarke (Portfolio Holder for Transport and Planning) stated that additional resources have been made available to provide the correct levels of staffing. However, some key officers have left the organisation. Councillor Izzi Seccombe noted that there is a national shortage of town planners with many being drawn into the private sector working for developers. 

Councillor Helen Adkins (Deputy leader of the Labour Group) reminded Cabinet that Council in May 2019 had agreed a motion concerning school deficits and a request that the Children and Young People Overview and Scrutiny consider a report on these. Councillor Adkins asked for that to be actioned. Regarding messages around increasing demand for adult social care and the reported underspend in the area Councillor Adkins requested more information on how these two (underspends and increased demand) are reconciled.

In response to Councillor Adkins’ latter point Councillor Les Caborn (Portfolio Holder for Adult Social Care and Health) observed that demand for adult social care services is being met. However, there is a growing demand for mental health services. The net result is that there are underspends in some areas and overspends in others. 

In conclusion, Councillor Butlin reminded members that a significant proportion of reserves is already allocated. The County Council is reviewing the risks that form the basis of the assignment of reserves to ensure that it is not double-counting them. In addition, a new strategy is being developed to govern how reserves are managed. Regarding the ability of the council to increase its staffing capacity, Councillor Butlin observed that it is restricted on what it can pay people.

Resolved

That Cabinet:

1.    Notes the forecast underspend of £1.829m for the 2019-20 financial year on the Council’s revenue budget;

2.    Notes the forecast underspend on the capital programme of £12.113m; and

3.    Approves the carry forward of the underspend on the capital programme of (£14.302m) in 2020-21 and future years and the changes totalling £2.189m to the cost and funding of schemes detailed in the report and Annexes A to M.