To inform General Overview and Scrutiny Committee of the budget outturn for 2013/14, and to provide the committee with an update on the 2014/15 budget.

The Chief Financial Officer provided the committee with a budget update, including the 2013/14 outturn and the 2014/15 position.  The key points included:

i.        The revenue outturn position for 2013/14 showed an underspend of £397k which represented an improvement against the previously reported forecast.

ii.       The three month position for 2014/15 would be reported at the end of July 2014 and the key issues and risks to achieving a balanced budget were outlined in the report.

iii.      A detailed breakdown of the Adults’ Wellbeing savings plan was provided in an appendix; the directorate had a target of £5.5m savings to deliver in 2014/15.   It was noted that the majority of schemes were rated green, with some on amber, and one on red (Open Book Review).

The Chief Financial Officer responded to questions from the Chairman, the principal points included:

1.       As with iii. above, risks were monitored across all the directorates.  It was confirmed that the Economy, Communities and Corporate savings plan of £7.7m was on track for delivery.

2.       Directors and Cabinet Members had spent a lot of effort making sure that the baseline position was correct and the budget was robust.  Nevertheless, demographic growth and safeguarding issues were creating pressures and risks across the country. 

3.       Borrowing levels were considered average compared to similar sized authorities.  It was reported that each new capital scheme was appraised on its merits and affordability.

The Cabinet Member Health and Wellbeing provided an overview of: the budget setting process; issues associated with the savings plans; measures to improve data reporting, assessment and resource allocation; uncertainties around new regulations; and the extent of the funding gap for councils resulting from reduced government funding and rising demand for services.  Notwithstanding the significant challenges ahead, it was considered that the council was heading in the right direction.

Committee members made a number of comments, including:

a.       Clarification was sought about the comparisons that could be made with other authorities in terms of borrowing levels given the council’s limited reserves and the relatively low income potential in terms of council tax and other revenue streams. 

The Chief Financial Officer said that he would provide information on this, including details of the asset base and comparable authorities.  He also said that recent decisions around prudential borrowing, such as sports centre provision, were coupled with reducing subsidies.

b.       Attention was drawn to capitalised change management costs, the requirement for local authorities to publish quarterly details of certain financial information, and to risks associated with disputes.

c.       The savings performance and monitoring information was welcomed but it was suggested that it would be helpful to be able to judge the savings against the total budget for the different lines of activity.

The Chief Financial Officer said that this could be included in reports to the committee going forward.

d.       It was acknowledged that local authorities were obliged to present their accounts in a particular way but it was suggested that, at least internally, finances could be represented in a way that was closer to standard business practice, so that costs and savings could be seen together.  It was considered essential that information was presented in a clear and transparent way.

The Chief Financial Officer said that Cabinet had raised similar issues around cost / benefit analysis.  Consequently, prudential borrowing projects would be monitored closely.

In response to questions from the Vice-Chairman regarding the main changes to the reported position in January for Adults’ Operations, the Cabinet Member Health and Wellbeing explained the background to the writing off of obsolete stock relating to the Community Equipment Service and said that he would provide a written response about the additional agency staff costs identified in the report.  The Cabinet Member commented that a forensic cleansing approach had been taken to costs on a number of occasions in the past year.  He added that the authority was looking to minimise the use of agency staff but it was difficult to recruit social workers.  The Chief Financial Officer commented on the need to focus on issues of materiality and the more significant risks related to demographics and unpredictable demand, rather than staffing.

There was a brief discussion about the use of the Public Health Grant.  The Chief Financial Officer outlined the purpose of the grant and the conditions attached.  The Cabinet Member Adults’ Wellbeing commented on negotiations regarding the transfer of commissioning work and said that meetings had been held with Public Health England and NHS England to ensure that the authority conformed to the terms of the grant.

RESOLVED:  That the final outturn for 2013/14 and the budget position for 2014/15 be noted.