Agenda item

Purpose:

The purpose of the report is twofold,

·         to provide all Members with holistic information on the revenue and capital outturn position of the Authority at the end of reporting period 2 which represents the financial outturn position for the 2018/19 financial year based on October inclusive activities.

·         to 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 £316,000 surplus, and approves the local education authority costs of compromise agreements being borne by the corporate redundancy budget rather than Children and Young People Directorate.

2. That they also recognise circa £1.3m extra capital resourcing provided recently and note that the revenue forecast is predicated on capitalising £444k expenditure accordingly, a decision that still needs to be considered by full Council in February 2019.

3. That Members note the 86% delivery of the budget setting savings agreed by full Council previously and a need for remedial action/savings in respect of £727k savings reported as delayed or unachievable by service managers.

4. That Members consider the capital outturn spend of £40.8m, introducing a £1m anticipated overspend and the presumption made around financing.

5. That members note the anticipated use of reserve funding predicted at outturn and the low level of earmarked reserves, which will notably reduce the flexibility the Council has in re-engineering services and facilitating change to mitigate the challenges of scarce resources going forward.

6. Members note the extent of movements in individual budgeted draws on school balances, and reported recovery plan intentions as a consequence of their approving changes to Fairer Funding guidelines since month 2

Memberscrutiny:

The Assistant Head of Finance/ Deputy Section 151 Officer presented the report and drew the Select Committee’s attention to the colour coded sections that highlight the Committee’s portfolio.  The Finance Manager, Children and Young People provided commentary on the Month 7 Budget position. Questions were invited from Select Committee Members as follows:

The Chair reminded the Select Committee Members that it was important to compare the effectiveness of services last year with this year, and look for new pressures and to consider if there are enough funds.

·         A Member asked when the ALN Review will be completed and also enquired if there was a shortfall in funding from outside authorities using Mounton House services.  The Chief Officer clarified that the ALN Review will be brought back to this Committee in February.  Regarding recruitment, it is a matter of striking a balance on the amount that we charge.  There are reducing pupil numbers in terms of income received from other authorities. There is some ability to flex costs but teacher ratios and property costs have to be adhered to. As pupil numbers decrease the cost per pupil to other authorities rises. We need to be mindful of excessive costs that could discourage buy in from other authorities. The position is regularly reviewed.

·         A question was asked why the budgets of the four comprehensive schools move frequently between surplus and deficit.  It was responded that circumstances such as staffing changes can impact unexpectedly.  Specifically, it was confirmed that the costs at Chepstow School are well controlled and the reduction in surplus was due to unplanned circumstances.  The authority is aware of the position and the costs; help is being provided to prepare for future pressures.

·         The Chair asked if there have been any unexpected pressures in year.  It was responded that generally, Children’s’ Services, school balances, the unknown quantity of the Alternate Delivery Model, the change in Management Support for SRS and the Council’s staffing remain pressures and make forecasting difficult.

In Children and Young People Directorate, the Chief Officer explained that balancing investment in schools and services, standards and outcomes are the priority. Unknown pressures related to the building projects, staffing and supply costs remain. 

·         The Chair referred to capitalising expenditure due to be considered by full Council in January 2019.  The report will be considered by Full Council in February 2019.