Agenda item

To review the financial situation for the directorate, identifying trends, risks and issues on the horizon with overspends/underspends.

Context:

A report was presented to Committee to provide Members with 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

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.

Key Issues & recommendations 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 4 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 6 months of financial year.

That Cabinet considers the capital monitoring, specific over and underspends, and importantly 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:

A question was raised regarding a large cohort of residents in Chepstow who required residential care. We were told that when clients go into residential care they are means tested, once their capital drops below 24K they can represent themselves for local authority funding and MCC have had 20 cases of this during this year.

It was asked if this would be happening throughout the County and we were told that the Welsh Government were looking to increase the capital threshold limit from 24K to 50K incrementally. From 1^st April 2017 the limit will be 30K, we have a provisional within the settlement from Welsh Government, but it will not be enough.

A question was raised by a member regarding the employment tribunal costs, in answer the officer advised the member that as it would not related to the adult portfolio he had little information to hand and he would look in to it further and get back to the member. (ACTION T.S.)

We were told by the Head of Service that Adult Services had been a great success over the past number of years. What we are seeing now is a consequence of pressures and demographics against a budget which has been reducing annually.