Agenda item

To submit a report by the Head of Function (Resources)/Section 151 Officer.

The report of the Head of Function (Resources) and Section 151 Officer setting out the financial performance of the Council’s services for the first half of the 2017/18 financial year (1 April, 2017 to 30 September, 2017) along with  a summary of the projected position for the year as a whole was presented for the Executive’s consideration.

The Portfolio Member for Finance reported that in February, 2017, the Council set a net budget for 2017/18 with net service expenditure of £126.647m. The budget for 2017/18 included required savings of £2.44m. Based on Quarter 2 figures, the overall projected financial position for 2017/18 including Corporate Finance and the Council Tax fund is an overspend of £1.924m or 1.53% of the Council’s net budget for 2017/18. This is a slight improvement on the position at the end of Quarter 1.Most of the overspend is due to the costs of Corporate Parenting with the Children and Families Service forecast to overspend by £1.89m. The situation is under review and it is hoped that measures being taken within the Children’s Services including a service restructure to allow more focus to be given to early intervention and intensive intervention will help the service manage expenditure. Some other services are overspending including Central Education as a result of the educational costs linked to 5 new out of county placements and transport to school, and Highways and the Transformation Service due largely to IT costs. However, a number of services have recorded underspends and these are detailed in the report. An invest to save programme was undertaken in 2016/17 with an allocation of £983k for individual projects. To date, £217k has been spent or committed from this allocation of funding during 2017/18 and the projects are at various stages of development with some closer to completion than others as outlined in Appendix CH to the report. The allocation includes an item of £87k for Lifelong Learning for the modernisation of business and performance processes. As this project is expected to require only £67k it is proposed that the remaining £20k be diverted to fund the development of an online shop and website for Oriel Ynys Môn which is also an invest to save project which should generate additional income.

The Head of Function (Resources) and Section 151 Officer said that although the situation has improved from that reported at the end of Quarter 1, the projected overall position remains one of a substantial overspend; work will be done with all services in the second half of the financial year to try to bring spending back into line with budgets. Should the current position prevail at year end, then any overspend at that time will be set against the Council’s general balances; these are at present in good shape and should help the Council  fund the overspend. However, the figures as presented do not take account of any added pressures which may arise as a result of adverse winter weather; there is a risk therefore that the overspend might  end up higher than the £1.924m forecasted. The assurance comes from knowing that the Council’s reserves are sufficient to accommodate this level of overspend.

The Executive noted the position and noted also that the Finance Scrutiny Panel is now keeping an eye on budget monitoring with a view to highlighting any issues with the Corporate Scrutiny Committee.

It was resolved –

•  To note the position set out in appendices A and B of the report in respect of the Authority’s financial performance to date and expected outturn for 2017/18.

•  To note the summary of contingency budgets for 2017/18 detailed in Appendix C of the report.

•  To note the position of the Invest-to-Save programme in Appendix CH and to approve a proposed change for £20k of the Learning Service’s £87k Invest-to-Save allocation for implementing the ONE management information system to be used to fund another Learning Invest-to-Save project for the development of an online shop and website for Oriel Ynys Môn.

•  To note the position of the efficiency savings 2017/18 in Appendix D of the report.

•  To note the monitoring of agency and consultancy costs 2017/18 in Appendices DD and E of the report.

•  To approve the capitalisation of Equal Pay costs up to £2.566m in accordance with the Welsh Government Capitalisation Directive which is effective to 31 March, 2018.