Agenda item - Financial Monitoring Report 2018-19

To provide an update on the year-end forecast for the 2018/19 County Council’s Revenue and Capital Budgets

Cllr Ray Theodoulou, Cabinet Member for Finance and Change, updated members on the year-end forecast for the 2018/19 County Council’s Revenue and Capital Budgets for the year ending 31 March 2019.

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

RESOLVED to:

1. Note the forecast revenue year end position as at the end of January 2019 for the 2018/19 financial year of a net £0.406 million overspend. This represents a £0.551 million improvement on the previous position reported to Cabinet on 30 January 2019;

2. Approve the draw down of £0.43 million from the Vulnerable People’s Reserve to Children’s Services to offset significant in-year variances on external placement budgets;

3. Note the forecast overspend in the Dedicated Schools Grant (DSG) of £5.19 million in 2018/19, which reduces to £1.54 million after adjusting for the £2.3 million of uncommitted DSG balances brought forward and the £1.35 million additional funds announced in December 2018 to support children with special educational needs; and also endorses on going discussions with the Schools Forum to agree actions to bring DSG back into balance;

4. Note the forecast capital year end position as at the end of January 2019 of £98.350 million against the current budget of £100.001 million – in year slippage of £1.651 million;

5. Approve the addition of £0.045 million to the Children & Families Capital Budget funded by a revenue contribution;

6. Approve the addition of £1.187 million to the Highway Capital Budget funded from a variety of sources as outlined in the body of the report;

7. Approve the addition of £0.004 million to the Waste Capital programme funded by a revenue receipt; and

8. Approve the reduction of £0.019 million contribution to the AMPS capital budget as detailed in the body of the report below.

Cllr Ray Theodoulou, Cabinet Member for Finance and Change, gave an update on the year forecast for the Council’s Revenue and Capital Budgets 2018-19 for the year ending 31 March 2019. The update was based on actual figures to the end of January 2019 and forecast outturn calculations to the end of the 2018-19 financial year.

Forecasting a year end deficit of £400k, Cllr Theodoulou confirmed this had been an improvement on the previous month, where the forecast had been £500k. Advising members of a number of significant drawn downs and transfers proposed to offset in-year variances against budget, Cllr Theodoulou explained that the proposals were required to address some of the ongoing challenges this and other councils continued to experience.

Members were advised that, delivery of Adult Care Services had resulted in a balanced year end budget, upheld from the transfer of funds from a variety of funding allocations and reserves. Adult Care Service reserves stood at £4.5m.

The Children and Families Budget continued to deteriorate, with a forecast year end deficit of £8.61m, (after transfers of £2.6m). Additional grant funding of £1.35m, (announced in December 2018 to support children with special educational needs), plus ongoing discussions with the Schools Forum to bring the Dedicated Schools Grant into balance, would attempt to alleviate some of financial pressures in this area. The Dedicated Schools Grant currently reported a net overspend of £1.54m.

Urgent efforts were being made to respond to the increasing number of children in care and to contain and reduce the costs of external placements.

Cllr Theodoulou reported underspends in other areas and funds held in allocated budgets (£1.5m), which would enable the council to manage the deficit within the forecast revenue account. Looking forward, the challenges to the Adult and Children’s Budgets continued to present difficulties in meeting projected budget forecasts whilst maintaining good levels of service.

Savings in the revenue account were reported at £12.8m against a planned target of £18.6m, (68% achievement against target).

The Capital Account was reported as being in a healthy position, showing an in-year slippage of £1.2m (approximately 1.5% of the annual programme).

Cllr Theodoulou referred to the detailed recommendations included within the report, including the transfer movements proposed at recommendations 5 to 8.