Revenue Budget Monitoring 2019/20 to the end of May 2019
Decision status: Recommendations Approved
Is Key decision?: No
Is subject to call in?: No
A report was submitted to provide a summary of the position of the 2019/20 revenue budget at the end of May 2019. The report gave details of the projected variances to budgets, the position of the Housing Revenue Account, Council Tax and business rate collection, revised prudential borrowing indicators, and the state of the Council’s contingency funds. Projecting forward from the position at the end of May 2019 it was forecast that by the year-end in March 2020 the revenue budget would be overspent by £3.495m. The report explained that the projected overspend was predicted to mainly arise in the children and adult social care budgets. Costs for external residential placements for children were higher than predicted. In the adult social care budgets there was significant pressure in the in-house supported accommodation budgets and home care services.
The report explained how each of the directorates was seeking to mitigate and address the budget pressures. The key risks would continue to be monitored and mitigations sought as required throughout 2019/20. The achievement of the approved savings targets would also be integral to this process and would continue to be closely monitored and reported throughout the year.
The report proposed a number of budget virements to reallocate funds between areas of the Council’s work. These were agreed:
· £300k from Chief Executive Corporate Items to the cross-cutting savings budget in Corporate Core Directorate made up of savings of £150k due to additional annual leave purchased by staff and the introduction of a shared cost (salary sacrifice) model for the purchase of Pension Additional Voluntary Contributions; and
· £560k from Cross cutting savings budget in Corporate Core Directorate to allocate across Directorates following the rationalisation of the senior management structures; and
· £2.692m from the Youth Service budget from Children’s Services to Neighbourhood Services to reflect a change in reporting arrangements.
When setting the 2019/20 budget the Council has agreed to hold some funds for contingencies, and other money that was to be allocated throughout the year. The report proposed the use of some of these budgets to be allocated. These were agreed:
· the release of £335K of non-pay inflation to enable the continued disposal of appropriate material at Redgate Holdings Ltd; and
· the release of £5.084m to service budget for the 2019/20 annual pay award.
The report also addressed use of the Council’s reserves. It explained that the draw-down of £12K of reserves had been requested. This was approved:
· £12k draw down from Transformational Challenge Reserve to support Manchester’s Fairtrade to promote Fairtrade in the city.
The report also explained that notification had been received in relation to specific external grants, the use of which had not confirmed as part of the 2019/20 budget setting process. Approval was given to the use of these funds:
· Local Government Association Cyber Resilience phase 1 grant of £25k, to be allocated to ICT, to support cyber security training for staff
· New Burdens funding of £85k to be allocated to Revenues and Benefits to fund additional temporary staffing resources.
It was noted that the report had also been considered at a meeting of the Resources and Governance Scrutiny Committee meeting in July. The views of the Committee were noted (Minute RGSC/19/42).
1. To recommend that the Council approve the proposed virements over £0.5m as set out in paragraph 61 of the report.
2. To approve the use of budgets to be allocated, the use of a reserve, the use of grants in addition to that already planned, and the three proposed virements, all as set out above.
Report author: Carol Culley
Publication date: 09/09/2019
Date of decision: 24/07/2019
Decided at meeting: 24/07/2019 - Executive