Agenda item

Purpose

The purpose of this report is to provide Members with information on the revenue and capital outturn position of the Authority at the end of reporting period 1 which represents the financial outturn position for the 2018/19 financial year based on May inclusive activities.

This report will also be considered by Select Committees as part of their responsibility to,

• assess whether effective budget monitoring is taking place,

• monitor the extent to which budgets are spent in accordance with agreed budget and policy framework,

• challenge the reasonableness of projected over or underspends, and

• monitor the achievement of predicted efficiency gains or progress in relation to savings proposals.

Recommendations proposed to Cabinet:

1. That Members consider a net revenue forecast of £471,000 overspend.

2. Members consider a capital outturn spend of £35.7m, which accords with budget provision for the year, after proposed slippage of £75,000. This describes a breakeven position not uncommon for this early in the year, although there is a potential for additional 21c schools costs in respect of additional asbestos removal and treatment costs not anticipated, which colleagues indicate could be the order of £350,000.

3. Considers the use of reserves proposed in para 3.8.1,

4. Members note that the low level of earmarked reserves will notably reduce the flexibility the Council has in meeting the challenges of scare resources going forward.

5. Members note the extent of movements in individual budgeted draws on school balances, and acknowledge a reported net forecast deficit of £622k resulting, and support the amendments to MCC’s Fairer Funding Regulations as described in para 3.8.13 for onward engagement with schools forum and governing bodies

Member Scrutiny

The Assistant Head of Finance/Section 151 Officer and the CYP Finance Manager introduced the report.  Select Committee Members took the opportunity to ask questions, as follows:

·         ALN Review: A Member referred to the deficit projected for Mounton House School and the income from other authorities and asked if the status quo could be maintained to attract more pupils external to Monmouthshire to ensure that the income source continues.  The Chief Officer explained that following the publication of the proposals earlier in the year, there has been no reduction in pupils at the school.  Cabinet was advised that the proposal for change will not proceed but the authority will work with the school and others to understand the need for that type of provision in Monmouthshire.  The capacity is for 55 pupils, currently there are 28 on roll.  Next year there will only be 1 Monmouthshire pupil on roll.  The Chair looked forward to updates regarding proposals.

·         Funding Formula: The Chair referred to the funding formula noting that 3 of the 4 secondary schools are in deficit, with the fourth in surplus but being closely monitored. With 17 schools forecasting deficits, it was questioned if the authority had the resources to monitor individual schools and commented that some schools are finding it very difficult.  It was questioned if there is a need to fundamentally review the funding formula.  The Committee were reminded that last year the authority invested in secondary schools in terms of exam fees.  It is was added that the formula is not the issue, but the reducing amount of funding available.  Committee Members were advised that there is discussion about a Gwent wide formula.