To report the forecast financial position for both revenue and capital expenditure to 31 March 2011 and provide an update on Directorates’ recovery plans instigated to address projected overspends.; treasury management activities; and amounts written off for individual debts.

(Councillor TM James declared a personal interest.)

The Committee considered the forecast financial position for both revenue and capital expenditure to 31 March 2011, an update on Directorates’ recovery plans instigated to address projected overspends; treasury management activities; and amounts written off for individual debts.

The report to Cabinet on 25 November was appended. 

The Head of Financial Services presented the report.  The projected overspend on the revenue budget was £2.4m.   She reported that the main overspends were in the Integrated Commissioning and Children and Young People’s directorates.  Both directorates had recovery plans in place, although the new Interim Director of Adult Social Care was reviewing the Integrated Commissioning recovery plan.  In any event the proposals would not take effect until the next financial year.  The recovery plan in Children’s Services had already delivered savings but these had been in part offset by increased additional external placements and placements for children with special needs.

Additional savings targets had been set for directorates supported by a restriction on discretionary expenditure.  This combination of targets together with additional central financing activity would deliver a balanced budget if directorates took the necessary action.

In relation to write offs she highlighted that the Council was performing far above average in collecting council tax and above average in collecting on other debts.

In the ensuing discussion the following principal points were made:

·         It was noted that the Revenues and Benefits Team performed well in comparison with other authorities for the collection of debt.  It was proposed that the work of the Revenues and Benefits Team in collecting debts was to be commended.  In response to a question the Director of Resources confirmed that where people did default on debts a range of options were explored.  This included looking at attachment orders on property in order to avoid people being forced to lose their homes. 

·         The potential for additional costs to be incurred under the waste disposal contract if waste growth between Herefordshire and Worcestershire varied by more than 1% was highlighted.  The Executive was urged to give careful consideration to whether additional cost effective action could be taken to avoid incurring additional costs under the waste disposal contract;

·         The financial implications of schools being granted academy status were discussed.  The Director of Resources commented that there was a potential implication for the sustainability of functions supplied centrally by the Council.  The Council and the Shared Services Joint Venture Company would clearly be seeking to attract business from the academies. 

The Deputy Chief Executive added that services provided by the Council inevitably carried an overhead cost, as to a lesser extent would those provided by the Joint Venture Company.  Whilst the Joint Director of ICT considered that schools who chose not to use Council Services simply on grounds of cost were not taking full account of the level of service the Council provided he recognised the need to ensure costs were competitive.

A Member observed that note should be taken that it was not important who provided services.  The key was that the services provided represented value for money.

·         It was noted that the first stage of negotiations on the Shaw Contract had been completed and would deliver some savings in the current financial year.  The contract was a long term one and negotiations with the contractor, in whose interests it was to deliver service improvements, were continuing.  A briefing note was in preparation.

·         The perennial overspend on the Integrated Commissioning budget was questioned.  The Director of Resources commented that, whilst increased demand was part of the problem, additional resources had been made available for social care over the years.  In particular £3.3m had been allocated based on a needs analysis to change the direction of care.   These measures had not been progressed as planned.  Whilst he considered additional resources would need to be made available for social care in the 2011/12 budget, the approach to provision of care did need to change, with a greater emphasis on personalisation.

It was suggested that a more realistic approach to the social care budget was needed, bearing in mind the persistent overspend by a similar amount year on year, and noting that costs were incurred in preparing and implementing recovery plans.

A view was expressed that there was scope for efficiencies and it was to be hoped that the development of locality working would, for example, reduce travel costs and inefficient use of time spent travelling.

·         The Director of Resources confirmed that a seminar on the Council’s financial prospects would be held for all Members once the details of the imminent financial settlement were known.

RESOLVED:

That (a)     the Revenues and Benefits Team be commended for its work in collecting debts;

         (b)    the Executive be urged to give careful consideration to whether additional cost effective action could be taken to avoid incurring additional costs under the waste disposal contract;

         (c)     the implications of schools achieving academy status be noted and monitored; and

         (d)    the Committee’s observations be reported to the Executive.