To update the Audit and Governance Committee on the financial position to 31 January 2013.  The Treasury Management position is also included.  As part of the Committee’s work programme it receives six monthly updates on the financial position.

The Chief Officer: Finance & Commercial updated the Audit and Governance Committee on the financial position to 31 January 2013.  The report was identical to the one that had been considered by Cabinet the previous day.  The report was also part of the Committee’s agreed work programme, forming the first of two updates planned for the financial year, which would be linked to the budget to provide the optimum amount of information.  The report presented the Council’s financial position to the end of January 2013, and gave projected financial information to the end of the financial year. 

The Chief Officer: Finance & Commercial explained the layout and format of information contained in the report.  The appendices set out the Council’s positions in terms of revenue, capital, and treasury management respectively.  The Treasury Management Report, although not strictly required as frequently as the revenue and capital information, would be included regularly as a measure of good practice, to ensure that members were kept fully informed of the Council’s up-to-date financial position. 

The Committee noted the key points summary on pages 11 and 12 of the agenda, and in particular the projected overspend of £3.9 million, which would need to be met largely from the general funds reserve of £6.1 million.  Referring to the table on pages 12 and 13, outlining the main financial movements from the December 2012 projected spend, members noted in particular the continued increases in expenditure for adult social care, and the significant number of claims under the Bellwin grant scheme in respect of flood damage. 

Members acknowledged that a significant proportion of the movement in adult social care expenditure arose from an increase in backdated packages for residential and nursing placements.  Herefordshire also faced additional challenges caused by a significantly higher than average ageing population, and the rural nature of the county, which sometimes made service provision exceptionally difficult.  In response to a question about the modelling used to calculate future demand for adult social care services, members noted that the Council had worked with an external organisation to make projections, due to the complex nature of the system.  The £354k included emergency/short-term intervention care, which was usually larger than anticipated and difficult to include in the projections. 

The Chief Officer: Finance & Commercial reported that the Council had received the highest number of Bellwin claims of any local authority in England due to the exceptional flooding experienced by the county in recent months.  The allocation of £356k represented a one-off excess charge irrespective of the number of claims made.  However, this was the first year that the Council had been required to pay an excess, and the Committee was advised that the Council had complained to central government about this.  Assurance was given that the increased incidences of flooding had been budgeted for as far as possible in future projections.  In response to a question about the winter gritting budget, he confirmed that the increase of £120k related specifically to gritting runs, and followed a budget-setting model which assumed  ...  view the full minutes text for item 57

To report the financial position for both Revenue and Capital budgets to 31 January 2013.  The Treasury Management position is also included.

The Cabinet Member Financial Management presented the report of the Chief Officer Finance and Commercial, which gave the financial position for both revenue and capital budgets to 31 January 2013, and projected financial information to the end of the financial year.  The report also contained the up-to-date treasury management position. 

Cabinet noted the key points summary on pages 99 and 100 of the agenda, and in particular the projected overspend of £3.9 million, which would need to be met largely from the general funds reserve of £6.1 million.  Referring to the table on pages 100 and 101, outlining the main financial movements from the December 2012 projected spend, members noted in particular the continued demographic pressures which were responsible for increases in expenditure for adult social care, and the significant number of claims under the Bellwin grant scheme in respect of flood damage.  The Chief Officer Finance and Commercial emphasised the importance of providing a clear picture of the overall financial position at all times, and to be able quickly to respond to any areas which took a different direction to that projected.  

During the discussion, the following key points were raised:

·           Members commended the financial team for securing excellent interest rates on short-term borrowing. 

·           Concern was expressed at the pressure caused by early discharges in the hospital system and the impact that this might have on other areas of the system.   It was acknowledged that the pressure could be mitigated in part by improvements in the home care and close-to-home care process. 

·           With reference to paragraph 20 of the report, it was confirmed that very limited information was currently available in relation to a pending fine for a data protection breach in children’s services.  The information would be made available to members when the investigation had been concluded, and this would help to avoid any future recurrences. 

·           With reference to paragraph 15.1 of the report, the Chief Executive confirmed that, having re-assessed the Council’s risk management statement, he was taking an immediate measure to effect a more robust system and increase financial control throughout the Authority.  This would take the form of regular financial control meetings for each directorate, to be chaired by the Chief Officer Finance and Commercial.  Cabinet noted that the meetings would begin in the very near future, and welcomed this move. 

RESOLVED:   that

(a)          the report and the forecast position be noted;

(b)          the fact that that the Leadership Team continues to deliver a further level of savings for 2012/13 in order to minimise any impact on reserves at year end, be noted; and

(c)          the Treasury Management report at Appendix C to the report, be noted.