To invite cabinet members to consider performance for the first two months of 2015/16 and the projected budget outturn for the year.

The cabinet member for economy, communities and corporate introduced the report which used to be presented as two separate reports. Performance is RAG-rated (red, amber, green) and although there were some high risks, there were controls in place.  Feedback on format of reports and the information presented was welcomed in order to make them as useful as possible.

The director of resources presented the financial highlights from the report. The overall projection of overspend was not a concern and there was confidence that this would be addressed through the year. The contingency fund and reserves could cover the overspend if things remained unchanged. There were concerns regarding safeguarding spending and plans not being achieved. Spending was at the same rate as last year alongside significant reductions in budget. However the HIPPS programme was proving successful. It had been anticipated that external fostering costs would reduce during the year but they had not reduced in line with the plan, hence the variance. Plans were in place to review all cases to ensure children did not stay in external fostering longer than necessary.  It was not expected that safeguarding would come within budget this financial year. Plans were in place to reduce agency staff, but there remained a need to staff the service. The ‘grow our own’ strategy through the academy was working but was a long term plan. Consideration was to be given to how to address budget plans for 2016/17 as there were plans to reduce the budget further.

The budget for adults and wellbeing and economy, communities and corporate directorates were spending within budget.

Budgetary control across the board was considered to be good.

In relation to interest rates, the director of resources explained that they had been low for a number of years but an increase at the turn of year was anticipated by the Bank of England. The impact on the council would be minimal as the majority of borrowing had been fixed at low interest rates.

In answer to a question from the group leader of the Herefordshire Independents regarding the monetary policy committee, it was clarified that this was made up of economists.

The director of adults and wellbeing answered his further question regarding the risk referred to in appendix D and non-compliance of the Care Act. The council remained in dispute with the clinical commissioning group regarding the amount of budget available to support the existing commitments and therefore the contracts had not transferred to the local authority. Ongoing dialogue was taking place and the actual service provision was continuing. Phase 2 of the Care Act was due to be implemented from April 2016; however the government had just announced that phase 2 would now be delayed until 2020. This risk would be amended in light of this announcement. In terms of phase 1, the information, advice and signposting function was now fully commissioned though would not be fully operational until later this year and so remained a risk to the council though mitigation actions were in place.

The group leader for the Liberal Democrats commented on the level of borrowing and the ability to maintain interest payments in the event of an economic down-turn, and asked about the impact on business rates and council tax. The leader commented that councils tended to be risk averse but it was not an option to not borrow for fear of rises in interest rates. The director of resources gave assurance that treasury management was sound, the economy was growing as was employment in Herefordshire. Rates and taxes continued to be paid during periods of recession and concerns were more about the level of grants.  

The group leader for It’s Our County referred to reported performance improvements in safeguarding, commenting that the report suggested delays and costs because of the system and noting that there was no variance reported for adults and wellbeing between net budget and outturn.  The director of resources explained there were both positive and negative variances and there was confidence that expenditure would be within the overall budget.  It was too early in the year to be precise on the level of overall spend against budget. 

The director for adults and wellbeing commented that the nature of referrals was reflected in a culture of not turning issues away which are recorded on the system thus creating a workflow to be responded to. Training was implemented in March and the impact could be seen as workers could challenge the definition of adult protection issues and advise the police whether or not to take action or refer elsewhere. This was improving and staff were more confident in challenging other organisations.  As regards performance, there was an issue of meeting self-imposed targets in the workflow and completing investigations, and by the next quarter performance would be improving.

The group leader for It’s Our County commented on the capital programme. There appeared to be a steep increase in capital budget for the ECC directorate. Clarification was welcomed on the relationship between capital spend within the period and considerations of what was projected within the re-profiling.

The leader commented on the need to guard against making changes to the format of report to ensure there is an understandable baseline. 

The director of resources confirmed that it was good practice to show reasons for variances and this would be detailed in future reports. 

The cabinet member for infrastructure requested that information regarding re-profiling be shared with group leaders rather than reporting in detail here.

The group leader for the Herefordshire Independents noted the excellent work presented in the report.  

The chair of the general overview and scrutiny committee referred to the re-profiling spend, noting that projects such as LED street lighting were already showing visible changes in the county.  In response to his question regarding the installation of solar panels on public buildings, the director for economy communities and corporate explained that a number of buildings were under consideration and final decisions would depend on best returns. This scheme was to be implemented from the autumn and a shortlist of three providers was identified.

RESOLVED

THAT:

(a)        the projected overspend of £0.6m be noted; and

(b)       performance for the first two months of 2015/16 be noted.

Cabinet members were asked to note that the next meeting will be on Friday 11 September at 2pm in the Council Chamber.

The cabinet member for transport and roads was congratulated for the postponement by one week of the planned roadworks on Belmont Road, Hereford to avoid their coinciding with the Three Choirs Festival.