Agenda item

Agenda item

Revenue Budget Outturn 2018/19 (formerly titled Revenue Budget Monitoring on main agenda)

Report of the City Treasurer (Deputy Chief Executive) attached

 

This report outlines the Council’s final Revenue Outturn position for 2018/19.

Minutes:

The Committee considered a report of the City Treasurer (Deputy Chief Executive), which outlined the Council’s position for 2018/19 for the Council’s revenue expenditure and income.

 

The main points and themes within the report included:-

 

·                For the previous financial year the outturn variance compared to the revised budget was an overspend of £293k;

·                This was a reduction of £0.767m from the overspend position of £1.060m reported in February 2019;

·                The large budget overspends in both Children’s and Adult’s Services were due to the need to cope with continuing high demands for support and service provision;

·                The balance on the General Fund Reserve at 31 March 2019 was £22.045m, with the budget overspend being taken from the reserve, which was still deemed to be a reasonable amount for the risks the City Council is facing;

·                The Housing Revenue Account (HRA) outturn position was a £11.064m favourable variance; and

·                A summary of budget allocations and transfers to reserves that had been approved by the Executive at its meeting on 26 June 2019.

 

Some of the key points that arose from the Committees discussions were:-

 

·                Clarification was sought as to whether Directorate underspends which had occurred due to vacant posts were not being used to offset the overspend in Children Services and Adult Services;

·                Was the Council’s ability to deliver a balanced budget dependent on Directorate underspends;

·                Was there any instances where vacancies were contributing to a reduction in the ability to deliver agreed levels of service

·                What was the level of vacant posts across all Directorates and at what grades were these vacancies;

·                There was concern that the Council was holding posts open for staff that had been suspended which were then being filled by agency staff and, as such, the post was costing the council twice;

·                What was the anticipated impact to Council Tax and Business Rates collection of arrears with the introduction to a 60 day breathing space payment and attachment to earnings;

·                Were the number of external residential placements in Children’s Services rising above the expect trend level;

·                How had the Leaving Care accommodation service improved the support offered whilst reducing costs by 30%;

·                Why had decision been made that there would be no increase in funding for SEND provision; and

·                Were some of the overspends within Directorates due to “one off” instances/events;

·                Concern was raised that the funding available to address the issue of homelessness in 2018/19 had been sourced from short term funding streams and that there was no guarantee that this funding would be available for 2019/20 or beyond.

 

The Deputy City Treasurer explained that the Council did not make budget assumptions on the levels of underspends in Directorates arising from vacant posts, but did allow for a small percentage (around 2%) of staff turnover in its budget planning process.  She advised that an element of the vacancy saving would be due to internal recruitment and the subsequent vacancy created elsewhere in the Council which was difficult to predict.  She confirmed that she did not have information available on the number of vacancies (and their grades) that currently existed across each Directorate but agreed to provide this information to Committee Members outside of the meeting.  The City Treasurer (Deputy Chief Executive) commented that as part of the Council’s recovery plan in 2018/19 it had been agreed that a number of posts would be held as vacant and that this was due to the climate of austerity faced by the Council.  She added that there was sometimes a challenge to fill particular vacant posts and the Council would look to fill these internally before looking to appoint externally.

 

The Committee was advised that in terms of the Council’s budget, it was anticipated that the rate of Council Tax and Business Rate collection would remain the same even in light of the 60 day breathing space payment and attachment to earnings proposals and as such no adjustment was required at the present moment.  The City Treasurer (Deputy Chief Executive) explained that there were a number of pieces of work underway on the possible impact of these proposals and once completed, the budget would be reset if necessary.

 

The City Treasurer (Deputy Chief Executive) advised that the original Leaving Care Service had not been the most cost effective for the Council and confirmed that the new service provision would provide an improved level of service at a reduced cost.  In terms of external fostering trends, it was acknowledged that the original reduction in placement target had not been achievable and there had also been an increase in the number of Special Guardianship Orders, which was in line with the objective of promoting permanency for children and young people within families, as such, the budget had been readjusted.  

 

The Deputy City Treasurer advised that the Council would seek to manage overspends in year and that these would then be looked at as part of the budget setting process for future years to identify any longer term implications.  In terms of SEND funding, there was previously a proposed transfer of funding from the schools block to the high needs block of 0.5% per pupil (£2m) in 2019/20.  However, in December 2018, the DfE announced additional funding nationally, of which the City received £1.281m per annum for 2018/19 and 2019/20 and as a result it had been agreed by the Schools Forum not to progress the proposed funding transfer from the schools block.  It was also acknowledged that the budget to tackle homelessness was supported by a number of grants and external funding streams which were not guaranteed for future years.

Decision

 

The Committee:-

 

(1)       Notes the report and the decisions taken by the Executive at its meeting on 26 June 2019; and

(2)       Requests that Members are provided with a briefing note on the number of vacancies that exist across all Directorates, including the grade of these positions and how long they have been vacant.

Supporting documents: