Agenda item

That the Committee notes the Revenue Budget Monitoring 2017/18 Month 7 report and confirms on this occasion that the issues which it wishes to have brought to the Cabinet’s attention are:

(a)       That revenue balances should be treated the same as capital: if budget is not utilised in the financial year, the service needs to reapply for that funding. (The 151 Officer offered to produce a report for a future meeting which will identify the implications of such an approach, which the Committee accepted); and

(b)       That the issues in Social Services, as shown on pages 93 and 94 of the report (Disability Services - Resources & Regulated Services; Mental Health Services - Residential Placements; and Development & Resources - Safeguarding Unit, totalling over £700K) be referred to the Social & Health Overview & Scrutiny Committee for examination and report back. ‘Continue to monitor and review’ is not sufficient action given the Council’s budget position for either under or overspends.

The Corporate Finance Manager presented the report on the revenue budget monitoring position for 2017/18 as at Month 7 for the Council Fund and Housing Revenue Account (HRA), prior to consideration by Cabinet.

On the Council Fund, the net in-year position was that spend was forecast to be £1.262m higher than budget, which was an increase of £0.115m from Month 6.  The most significant projected variances were for additional high-cost out of county placements and the delay in implementing the bus subsidy efficiency in-year.  However, this had been offset by the transfer of school transport costs from the Streetscene and Transportation portfolio as they would now be funded by Education and Youth.  On overall planned efficiencies included in the report, it was estimated that 93% would be achieved by year end.

New risks emerging in-year would require analysis of impacts on the 2018/19 budget and as discussed at the recent County Council meeting, the amounts for the Council Tax Reduction Scheme and Intermediate Care Fund were included within the Stage 2 budget options.  Further work was planned on other significant issues such as the procurement of local and school transport following the Member workshop, the escalating costs for out of county placements and meeting the budgeted income target.  An update on reserves and balances indicated that the £20.3m of earmarked reserves available at the start of the financial year were expected to halve by year end.  The planned utilisation of the Budget Strategy Reserve and the projected reduction in Schools Balances were highlighted as two examples of significant reductions.

No significant changes were reported on the HRA, where in-year spend was projected to be £0.035m lower than budget.

As requested by the Chairman, the Corporate Finance Manager agreed to provide information on ‘Flintshire Enterprise Ltd’ which appeared on the table of earmarked reserves.

Councillor Jones asked about the lower than anticipated levels of income from County Hall parking permits and was informed that this variance would be reviewed for any impact on the 2018/19 budget as with the others detailed in the table, and the outcome reported in the New Year.  Councillor Jones referred to the table of earmarked reserves and said that those showing no movement to year end (totalling £2.45m) should be brought back into the budget for use rather than automatically rolling over.  The Corporate Finance Manager explained that the table was included in quarterly reports and that as part of financial management planning, the amounts were held for various reasons and were subject to review.

Councillor Jones proposed that the balances on revenue should be treated the same as capital and that if not utilised in the financial year, the service should have to reapply.  This was seconded by Councillor Heesom.  The Corporate Finance Manager agreed that a report would be submitted to a future meeting to understand the implications of this.

On Appendix 1 to the report, Councillor Jones said it was useful for variances to be shown in red.  He cited three variances in Social Services (Disability Services - Resources & Regulated Services; Mental Health Services - Residential Placements; and Development & Resources - Safeguarding Unit) totalling over £700K of overspend where the action was ‘to continue to monitor and review’.  He proposed that these be referred to the Social & Health Overview & Scrutiny Committee for examination and report back as the explanation was insufficient in view of the Council’s budget position.  Officers explained that the nature of many of the Social Services areas were demand led, with obligations to meet statutory duties, and that consideration of budget realignment was ongoing across services.

The Corporate Finance Manager agreed to pass on concerns about the financial impact of delays on Household Recycling Centres and Flint car parking charges.  On the latter point, the Chief Officer (Governance) provided brief explanation on the background and would request a more detailed response from the Chief Officer (Streetscene & Transportation).

Councillor Heesom spoke about the need for Members to receive more detail on the evaluation of the base budget for each portfolio to help understanding of the Stage 2 proposals.  The Corporate Finance Manager said that this was not practical due to the significant number of underlying cost centres which would not assist the decision-making process.  The Chief Officer drew attention to the level of detail in the resilience statements shared recently with Members.  The Corporate Finance Manager responded to queries on earmarked reserves for the Budget Strategy Reserve and Single Status, advising that a final review of all reserves would assess adequacy for the Council’s needs.  On inflation, the main issues such as energy increases were built into the 2018/19 forecast.

Councillor Woolley stressed the importance of a written audit trail of committee resolutions to demonstrate accuracy.  He shared the concerns about the insufficient explanation of actions on variances, pointing out the absence of any action on Transportation.

The two recommendations proposed by Councillor Jones were clarified and duly supported by the Committee.  During discussion, the Democratic Services Manager explained that deadlines did not allow time for these points to be included in a written report to Cabinet and that he would instead email the Leader of the Council and statutory officers, copying in Members of the Committee.

RESOLVED:

That the Committee notes the Revenue Budget Monitoring 2017/18 Month 7 report and confirms on this occasion that the issues which it wishes to have brought to the Cabinet’s attention are:

(a)       That revenue balances should be treated the same as capital: if budget is not utilised in the financial year, the service needs to reapply for that funding. (The 151 Officer offered to produce a report for a future meeting which will identify the implications of such an approach, which the Committee accepted); and

(b)       That the issues in Social Services, as shown on pages 93 and 94 of the report (Disability Services - Resources & Regulated Services; Mental Health Services - Residential Placements; and Development & Resources - Safeguarding Unit, totalling over £700K) be referred to the Social & Health Overview & Scrutiny Committee for examination and report back. ‘Continue to monitor and review’ is not sufficient action given the Council’s budget position for either under or overspends.