Agenda item

Context:

·         To provide information on the forecast revenue outturn position of the Authority at the end of period 2 which represents month 6 financial information for the 2016/17 financial year.

·         To assess whether effective budget monitoring is taking place.

·         To monitor the extent to which budgets are spent in accordance with agreed budget and policy framework.

·         To challenge the reasonableness of projected over or underspends.

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

Recommendations proposed to Cabinet:

·         That Cabinet notes the extent of forecast revenue overspend at period 2 of £839,000, an improvement of £529,000 on previous reported position at period 1.

·         That Cabinet expects Chief Officers to continue to review the levels of over and underspends and reallocate budgets to reduce the extent of compensatory positions needing to be reported from month 6 onwards.

·         That Cabinet appreciates the extent of predicted schools reserve usage and an anticipation that a further four schools will be in a deficit position by end of 2016-17.

·         That Cabinet approves a caveated use of reserves to finance £318,000 employment tribunal costs if the Council’s budget is not able to absorb the effect of this extraordinary expenditure over the remaining six months of the financial year.

·         That Cabinet considers the capital monitoring, specific over and underspends, and that Cabinet recognises the risk associated with having to rely on a use of capital receipts in the year of sale and the potential for this to have significant revenue pressures should receipts be delayed and temporary borrowing be required.

Member scrutiny:

·         When a school closes, any surplus budget comes back to the local Authority to be used for educational purposes.

·         Shirenewton and Trellech Primary Schools are carrying forward quite substantial sums.  It was noted that Shirenewton Primary School has been quite successful at generating income, savings have been generated and the school has been prudent in its allocation of resources. Officers have met with the school to discuss establishing an investment plan for the surplus.  Trellech Primary School has also been successful with its grants.  The school, along with Shirenewton Primary School, is a part of the pioneer network of schools whereby they receive additional funding from Welsh Government to be able to develop the curriculum.  Caldicot and Gilwern schools are also a part of the new deal pioneer school network, so there might be some fluctuation in these schools’ budgets also.

·         10 of Monmouthshire’s schools are likely to be in a deficit budget.  However, officers have ‘upped the ante’ on schools holding large surplus budgets.  At Month 9 it is hoped that an improvement will be seen whereby schools will hopefully be receiving more grants.  The local Authority has been better informed by the Education Achievement Service (EAS) with regard to funding that it is distributing to Monmouthshire schools.  It is anticipated that throughout the year, school’s spending plans will change.

·         Forecasting schools balances is challenging.  Officers are working with the EAS and Welsh Government to obtain the certainty of funding earlier which will better inform the Authority’s forecasts.  Schools are being encouraged to have less of a surplus budget.

·         Schools are working well at cluster level. It is important to maximise the value going towards pupils.  Changes to the Pupil Deprivation Grant (PDG) next year will mean that clusters will need to work more closely together to support the work into the secondary phase.

·         A Court Improvement Plan has been developed which in time will address the issues around the recurring overspend on legal costs and that is the fourth pillar of the Children’s Services Improvement Programme.