Agenda item - Financial Monitoring Report 2018/19

To provide an update on the financial forecast on the 2018/19 revenue and capital budgets.

Having considered all of the information, including known proposals, alternative options and reasons for the recommendations, Cabinet noted the report and

RESOLVED to:

1. Note the forecast revenue year end position as at the end of August 2018 for the 2018/19 financial year of a net £2.711 million overspend.

2. Note the forecast capital year end position as at the end of August 2018 of £0.248 million slippage against the current budget of £103.731 million.

3. Note the forecast overspend in the Dedicated Schools Grant (DSG) of £3.24 million in 2018/19, which exceeds the £2.4 million of uncommitted DSG balances brought forward, and endorses on going discussions with the Schools Forum to agree actions to bring DSG back into balance in future years.

4. Note the recommendation to Council regarding the funding of the M5 Junction 10 works within the Cheltenham Cyber Business Park – Transport Mitigation and M5 Junction 10 Business Case Development report elsewhere on the agenda.

5. Approve a one off transfer of £0.5 million from the Insurance budget in Technical and Corporate to Highways to support the costs associated with the demobilisation of the Amey contract and the mobilisation of the new highways contract.

6. Approve the allocation of £1.470 million of the additional Business Rates Retention (BRR) pilot income of which £1 million will be used to offset demand pressures within Adult Social Care and £0.470 million will be used to fund electric vehicle infrastructure. Both these allocations are in line with those approved by Council in February 2018.

7. Approve the addition of £0.013 million to the Highway Capital budget funded from a variety of sources as outlined in the body of the report.

8. Approve the transfer of £0.150 million from the Highways Capital Programme to the Strategic Infrastructure Capital Programme to fund the anticipated overspend on the Priory / Oakley flood alleviation scheme.

9. Note the risks and opportunities associated with entering into a Gloucestershire 75% Business Rates Retention Pilot in 2019/20 and:

Support the application to the Government to become a pilot 75% Business Rates Retention in 2019/2020 for Gloucestershire.
Authorise the Director: Strategic Finance, in consultation with the Deputy Leader and Cabinet Member for Finance and Change, to commit Gloucestershire County Council to entering into the pilot for 75% Business Rates Retention in 2019/2020 for Gloucestershire in the event the bid to DHCLG is successful, and
Note that in the event the pilot bid is unsuccessful then the Council will remain in the Gloucestershire Business Rates Pool for 2019/2020

Cllr Ray Theodoulou, Cabinet Member for Finance and Change, presented the Financial Monitoring Report 2018/19, (October 2018), including an update on the financial forecast for the 2018/19 revenue and capital budgets.

Cllr Theodoulou reported a forecast year end position as showing a £2.711million overspend on a net budget of £418.081 million. Cllr Theodoulou informed members that this position included a forecast overspend in the Children and Families budget of £8.92 million, (reduced to £6.32 million from the council’s use of one-off income generated by the business rate retention pilot scheme).

Cabinet noted that the impact of the emerging overspend in the Dedicated Schools Grant was being addressed by the Schools Forum.

The Adult Care Budget had been forecast with a balanced position for the 2018/19 year end, a forecast achieved from use of the one off transfers and allocations detailed on pages 30 and 31 of the financial monitoring report.

Cllr Theodoulou outlined some of the challenges impacting on the Adult Care and Children and Families Budgets, including the repercussions of an ageing population and the increasing number of children coming into care.

Acknowledging the £1.2 million overspend reported by the Highways Commissioning Group, Cllr Theodoulou explained that the overspend was largely attributed to responding to essential road repairs and the damage caused by adverse weather conditions earlier in the year. It was hoped a transfer of £500k from the technical and corporate budget would support this process.

Cabinet was asked to note the recommendation to Council to agree funding for works to Junction 10 of the M5 Motorway Junction, (as set out on page 45 of the agenda). This included approval of an allocation of £275k from the A417 Missing Link Reserve.

Cllr Theodoulou reported that the Capital Budget was expected to meet forecast by a small margin. Savings achieved from Quarter 1 of the 2018/19 budget (£5.1million) represented 31% of the annual target. Achievement of the target was dependent on planned savings within Adult Care Services.

Referring to the progress of the Gloucestershire Business Rate Retention Pilot Scheme, Cllr Theodoulou referred to pages 40 and 41 of the agenda for details of the proposed bid to participate in the 2019/20 Pilot. Following the success of the first scheme, Cabinet was asked to approve participation in the scheme should the bid be approved.