To report the forecast financial position for both revenue and capital to 29 February 2012.

The Cabinet Member Corporate Services and Education presented the report to Cabinet.  The following points were made in discussion:

·         The overall revenue budget position for 2011/12 shows a £634k projected overspend, approximately 0.4% of the Council’s £146.3m revenue budget excluding dedicated schools grant.  Any overspend would put pressure of the Council’s reserves.

·         People Services Directorate has a projected overspend of £4.6m.

·         A review of central budgets has identified areas where contributions can be made to offset directorate pressures.  The projected savings from procurement activity within centrally held budgets has been rephrased and carried forward to 2012/13.

·         Financial projections throughout the year have shown an overall reduction in overspend as the year has progressed.  This has been achieved through controls on discretionary spend and a review of budgets held centrally.

·         The capital programme for 2011/12 has a forecast out-turn spend of £58.7m.

·         The overall revenue position is mitigated by savings on borrowing and investments.  The projected out-turn is for an underspend of £1.07m on borrowing costs and £229k on interest received.  Where appropriate refinancing has been carried out to reduce capital programme costs.

·         In response to a question relating to the extra £150m funding from central government and West Mercia Supplies (WMS) the Chief Executive reminded Cabinet that there was a strong business case for the sale of WMS.  The strategic budget challenge lay with the needs of older people hence the activity around recovery plans. 

·         In response to a question on patient discharges from hospital and whether there was pressure to exit patients from hospital before they were ready to go home, was because it took the patient from the hospital budget to a social care budget.  It was stated that the national and local position was to get patients home as soon as possible.  This was based on evidence that the elderly in hospital lose their confidence and independence.  It was stated that in the West Midlands there was no evidence that patients were being delayed in hospital or that they were being released too quickly.

RESOLVED

              THAT:

a)    The report and the forecast deficit position be noted; and

b)    The Chief Executive’s requirement that Director’s deliver recovery plans to ensure a balanced revenue budget be noted.