Agenda item

(To consider a report from Michelle Grady, Assistant Director – Finance, which invites the Board to consider the Revenue Budget Monitoring Report 2020/21 – Quarter 2 which is being presented to the Executive on 1 December 2020. The views of the Board will be reported to the Executive as part of its consideration of this item)

Consideration was given to a report by theAssistant Director – Strategic Finance, on Revenue Budget Monitoring 2020/21 Quarter 2, which was due to be presented to the Executive on 1 December 2020.  The views of the Board would be reported to the Executive as part of its consideration of this item.

The report compared the Council's projected expenditure with the approved budget for 2020/21, and provided explanations for any significant over or under spending.

The overall revenue position was a forecasted underspend this year of  £1.973m (excluding schools and Covid-19). There was also a forecast underspend on capital financing charges of £7.868m, this was excluded from this forecast position at this stage. It was planned that the capital financing underspend would be used to manage future fluctuations in the annual capital financing budget by transferring it to the capital financing earmarked reserve. It was assumed that the forecasted Covid-19 position would be contained within the government emergency grant forecasting a surplus of £7.673m. Included in this forecast was an estimated additional grant of around £4.200m which could be claimed to cover losses of income. It was forecast that general reserves at the end of the year would remain within the target range of 2.5% to 3.5%. The impact of the revenue budget forecast on the Council's resilience had been assessed and the conclusion was that financial resilience remained strong due to the current forecast of an underspend. There were healthy reserve balances and financial resilience would continue to be strengthened.

Members discussed the report, and during the discussion the following points were noted:

·         The impact of Covid-19 – the current forecast surplus of £7.673m would be used to cover the additional costs arising due to a rapidly changing situation. The Government had announced additional support going into the new year for Covid-19, and the Council was expecting some additional costs to filter into the new year, particularly in relation to adult social care but also in relation to Children's Services and home to school transport. The Government had so far provided funding when pressures were known and had committed to supporting councils in the new year with any shortfalls such as around council tax and tax base losses. There was no immediate concern for the finances of the Council, however it was expected that some businesses and members of the public were likely to struggle to pay rates and council tax in the future. Concerns were highlighted about the longer term impact on funding in future years.

·         Cost pressures in Children's Services social care budget – the high cost pressures related to Higher Needs, an increase in requests for Education, Health and Care Plans due to children being off school for a significant amount of time, and Looked After Children requiring specialist placements and the lack of market provision for children with complex needs in the independent sector. To address these two cost pressures, the Transformation Programme contained two projects to look at how best to support Special Educational Needs and Disabilities (SEND) and children who were at risk of becoming looked after by the local authority. In relation to SEND, a Specialist Advice Hub had been set up to enable SENCOs in schools to access specialist advice early and signpost schools to other services such as mental health who could better meet the needs of children and young people. This was still in the early stages but was already demonstrating positive results. For Looked After Children, a Valuing Care project was being considered to better meet and match the needs of children looked after in their foster placements and also investment in specialist small residential homes to be more local and cost effective, and provide better quality services. These would be brought to future meetings of the Children and Young People Scrutiny Committee for consideration.

·         Cost pressures in Children's Services Home to School Transport budget – the impact of Covid-19 on school transport had resulted in additional vehicles needing to be put in place to cope with social distancing rules in line with national guidance. The Council had received a grant from the Government for school transport and this was currently covering the increased costs for the additional vehicles but there was a risk that this could become a future cost pressure. A wider issue post Covid-19 could be less competition for school transport contracts which could create further cost pressures. A wider project under the Transformation Programme was being scoped out to address the ongoing cost pressures on the school transport budget.

·         Out of county placements for SEND – through the Building Communities of Specialist Provision Strategy, the Council was investing capital in special schools to create more spaces and investing in new special schools as well. This strategy would enable more children and young people to receive education within Lincolnshire.

·         Overspend on Waste Services – this was due to the previous contractor going into administration and needing to find a new contractor, from a limited number of providers, to quickly take over running the services. Due diligence was undertaken before entering into a contract with a provider to check cashflow and that they had a sufficient viable trading record. However there was always a time lag and it would be based on a snapshot at the end of the financial year. Some contracts had been going for a number of years now, and during this time the financial position of a contractor could have changed. The level of contamination in recycled material continued to be an issue as this degraded the value of the waste. The proposals to do a separate cardboard collection should reduce contamination going forward. In addition, due to Covid-19, more waste and recycling had been created due to people being at home more. A forward plan of priorities for the next three to five years was being drafted which would look at measures to mitigate cost pressures and invest to save. The importance of working closely with district councils and The Waste Partnership on any new measures and issues was highlighted. The forward plan would be brought to a future meeting of the Environment and Economy Scrutiny Committee for consideration.

·         Underspend on the Redundancy budget – this was a base budget which was included each year to cover any potential redundancy costs and pension costs as a result of restructuring. As there had been relatively low level of restructuring taking place across the Council recently, an underspend was anticipated of approximately £1.5m. Going forward, there might be some changes in the workforce as a result of the Transformation Programme and therefore a redundancy budget might be required in future.

·         The Chairman of the Adults and Community Wellbeing Scrutiny Committee highlighted that the Committee had considered the adults social care budget at its meeting on 25 November. The Committee was impressed with the service area continuing to provide its services within budget and on target despite Covid-19. The staff and partners had been thanked for this great achievement. It was suggested that other Chairmen of Scrutiny Committees may want to write to staff in their service areas to recognise their efforts in maintaining services during these challenging times.

RESOLVED:

1.    That the Board unanimously support the recommendations to the Executive, as set out in the report;

2.      That a summary of the above comments be passed on to the Executive as part of its consideration of this item.