Agenda item

(To receive a report from the Executive Director – Resources which provides an update on revenue spending compared with budgets for the financial year which started on 1 April 2019)

That the current position on the revenue budget be noted.

Consideration was given to a report from the Executive Director – Resources which provided an update on revenue spending compared with budgets for the financial year which started on 1 April 2019.

The Assistant Director – Strategic Finance advised that the tables in the report had shown the actual income and expenditure for the first eight months of the financial year to 30 November 2019, along with the forecasts for spending and comparison of the forecasts against the approved budgets.

The Executive was advised that the total council revenue spending was predicted to be £6.481m less than the total budget (excluding spending on schools), and general reserves at the year-end were forecast to be within the 2.5% - 3.5% range of the total budget based on current spending.

The explanations for the variances in budgets were set out in pages 16 – 25 of the report.  An underspend of £2.2m was highlighted and £1.2m of this was associated with the IMT budget.  In other budgets, it was forecasted that there would be an overspend of £3.632m which was due to a reduction in capital receipts income and some increase in insurance premium costs.

The Chairman of the Overview and Scrutiny Management Board (OSMB) advised that OSMB had considered the Executive report at its meeting on 30 January 2020 and had supported the recommendation in the report.  The comments of OSMB had been circulated prior to the meeting for consideration by the Executive.

The Chairman of the OSMB highlighted that a number of points had been considered, which included the capacity to accurately forecast budget spending.  In particular, the overspend on insurance due to increased claims for car damage from pot holes.  It was also raised whether underspends could be used in-year rather than accumulating to the end of the year in order to provide flexibility.

The Executive was advised that for 2020/21 a significant review of all budget lines had been undertaken, and there was confidence that the budget being recommended was accurate.  However, it was acknowledged that as time progressed there was a chance that accuracy would vary, and those variances were highlighted in the report presented to this meeting.

In response to a question of whether the underspend for Adult Social Care could have been reasonably predicted, the Executive was advised the directorate was becoming a lot stronger at being able to predict needs in terms of budget requirements, however, there would always be variances.  In 2019, Adult Care had benefitted from the work with Serco in relation to the carrying out of financial assessments.  The authority had also been able to generate more income from working with NHS partners, particularly around mental health services.  It was highlighted that £1m was a little more than a day's spend in terms of running adult social care services.

In terms of the reported underspend in Children's Services, the Executive was advised that this was due to the completion of the Fire Houses in Denton Avenue, Grantham.  This meant that Children's Services were able to rehabilitate six young people from out of county back into the county, and this process happened much quicker than expected.  It was noted that this had been a pilot, and so in future the directorate would be able to more accurately budget these activities.

In terms of the IMT underspend it was reported that this was far more controlled and smaller than in previous years.  The underspend had occurred due to issues around timing, as some projects had not been delivered as quickly as planned and so some funding had been carried forward to the following year.  A planned restructure had also been stopped when the new Executive Director came into post so he could examine it in more detail.  It was also reported that IMT as an industry moved very quickly, and new products could come onto the market which were more efficient and cheaper.  In conclusion, the underspend for the current year was an improvement on the previous year and it was an improving picture.

RESOLVED

            That the current position on the revenue budget be noted.