Agenda item

Context:

To receive information on the revenue and capital outturn positions of the Authority based on activity data at month 2.

Recommendations Proposed To Cabinet

      i.        That Members consider a net revenue outturn overspend of £164,000.

     ii.        Members consider a capital outturn spend, forecast by service managers to agree with budget.

    iii.        Members note that the low level of earmarked reserves, which will severely reduce the flexibility the Council has in meeting the financial challenges of reducing settlements and consequent need to redesign services.

   iv.        Members note the significant forecast reduction in the overall school balance at the end of 2017/18 and supports the continuing work with schools to ensure that the Council’s Fairer Funding scheme requirements are met and that the overall schools balance reverts to positive position at the earliest

            opportunity.

Member Scrutiny

The Chair asked why the monitoring months had been altered. Information was provided that this year a change of approach is being piloted. Instead of quarterly reporting, monitoring will be at Month 2, Month 7 and at outturn. This allows SMT and DMTs more opportunity to reflect on and actively influence figures. Monitoring will be more meaningful and reassurance was given that managers and officers will receive interim monitoring information.  A proposed enhancement to the ledger facility will allow officers and Members to access financial information in real time.

It was explained that Month 7 was preferred because it is the month following the start of the academic year and is therefore more convenient for Headteachers. It was queried if Month 3 would be better than Month 2 and responded that both would provide similar information but the preference was to use the earlier date to obtain an initial position and forecasting purposes.

In terms of both Adult and Children and Young People Services, it was questioned if there is enough money in the budget to continue to provide services if pay rises above 1% are realised.  It was explained that the potential pay rise is a smaller element of the budget and is not as relevant as the budget for adult social care.  Of more concern is the increase in capital threshold limits for adult care which creates a draw on local authority funding at an earlier point, also reference was made to the impact of national minimum wage.  It was explained that there are grants available from Welsh Government which won’t necessarily cover the total liability. Full advantage is taken of the grants available and that position is reflected in the forecasts.  The challenge to provide services, within limited resources, increases every year and it was commented that there is a national issue regarding adult social care budgets not being sustainable in view of improved life expectancy.

The Head of Adult Services added that the adult social care budget is closely monitored to look at all costs and their impact.  For example, in terms of capital threshold, it was detected that there was an increase in take up in the south of the county.  Detailed analysis illustrated that the increase was not from practice placements but more people self-funding.  Their capital had then dropped below threshold and the authority assumes responsibility.  There is a further impact from new care homes being built and people migrating to the area who may be self- funding and then fall below the capital threshold leading to unpredictable costs.  It was added that the authority has a good record of cost avoidance and has been successful in holding demand back through the current operational model.

The Chief Officer directed Select Committee Members to the following report: http://www.health.org.uk/publication/path-sustainability

The Chair raised the £1m overspend last year and questioned if there is a reserve. It was confirmed that it has been possible to access corporate reserves for staffing restructure, redundancies etc but there are no reserves within the department budget as in some councils.  It was confirmed that the authority operates a holistic reserves policy with some exceptions in which the net bottom line is analysed before looking at replenishing or utilising reserves.  It was recalled that whilst there was an overspend in social care, this was mitigated by other underspends which were used to replenish reserves. It was commented that there is little headroom to facilitate service change. Reserves are currently held at 5.08% which falls within acceptable guidelines. Welsh Government advise that councils should not retain large balances during this period of austerity.

The Chair sought clarification if the redevelopment of Mardy Park and the refurbishment of the caretaker’s bungalow at Abergavenny Leisure Centre were examples of capital expenditure.  The Committee were informed that there are small elements of capital spend in relation to adult services which is likely to be from different projects and budgets.

The Chair queried if long term plans might see the development of the health centres in Hubs and it was responded that council considers the capital programme for the coming year and revenue budget in January/February which determines priorities and unmet demand.  Last year, for example, a potential replacement for Severn View in a few years was considered which may present opportunities for co-location of services.

It was clarified that Budden Crescent is rented from Charter Housing.

Considering the development of Hubs as a strategic direction, the authority already has Mardy Park, Monnow Vale and Chepstow Hospitals which offer integrated provision.  Monnow Vale houses a range of services and intervention in an integrated health and social care facility.  Mardy Park is moving to a fully integrated hub with e.g. memory services, clinics from Nevill Hall Hospital and significant community engagement element.  Consideration of the development of Chepstow Hospital as a hub is in progress and a sub hub is being developed in Usk with similar plans for the Caldicot area to provide health and social care. 

A Member commented that this approach will attract top doctors to the area.  The Member noted that it can be difficult to access services.

Considering capital resourcing, the Select Committee were informed that an Integrated Care Fund is available through the Greater Gwent Partnership to further the strategic intent to develop hubs.  Additionally, Welsh Government has funds for primary care development.  There will be further opportunities to access pots of capital outside of the Council’s capital programme.

In response to a question, it was explained that the Abergavenny hub is not in the 2017/18 capital programme this year as there is no quantified cost.  Members will have control when this item is added.