Deputy Leader of the Council and Cabinet Member for Finance

To receive the monthly in-year budget update and:

i)              To note that the forecast revenue outturn for the year is an overspend on services of £7.396m which reduces to an overspend of £3.688m when including unallocated contingency budgets and changes to funding budgets (para 4);

ii)             To note that the Council’s approach to in-year budget monitoring and management is being strengthened – as part of a wider approach to improving corporate governance at RBWM - as set out in paragraph 5.1; and

iii)           To note the forecast capital outturn is expenditure of £46.332m against a budget of £87.784m (para 10).

AGREED: That Cabinet:

i)               noted the forecast revenue outturn for the year was an overspend on services of £7.396m which reduced to an overspend of £3.688m when including unallocated contingency budgets and changes to funding budgets (para 4);

ii)             noted that the Council’s approach to in-year budget monitoring and management was being strengthened – as part of a wider approach to improving corporate governance at RBWM - as set out in within the report; and

iii)            noted the forecast capital outturn was expenditure of £46.332m against a budget of £87.784m (para 11).

Councillor Jones, Deputy Leader of the Council and Cabinet Member for Finance, introduced the monthly budget update to Cabinet. She stated that additional processes had been put in place, which had seen good progress in addressing the financial situation. Month 7 showed an increase in demand for Adult’s services, which was a statutory service, due to additional complexed needs and additional audit fees of £400,000. She added that despite this amount being equivalent to the fees in 2019/20, this had not been included within February’s budget. The total forecasted overspend for the end of the financial year was now £7.3 million, with the contingencies being applied, this would reduce to £3.7 million. Without the hard work from officers in implementing the new processes such as a Spending Control Panel, this could have seen an even greater increase of £1 million.

Councillor Jones then said in reference to the audit fees that the finance team had been under-resourced for some time and their focus has been on day-to-day tasks. She said that things were now being focussed upon and the recruitment of more staff would now occur. As part of the administration’s transparency agenda, appendix B outlined some risks and assumptions, with an impact if known. This had been newly introduced. She then said that external borrowing was forecast to be £204 million, and that the Council needed to begin to repay the accumulated debt, which had not been addressed over the previous four years.

Councillor Jones then outlined the recommendations that were before Cabinet. She then proposed a minor amendment to the recommendation that was outlined within the report itself. These were to note that the steps in recommendation i) that referred to improving governance had moved from paragraph 5.1 to the summary section and that the capital figures were in paragraph 11 and not 10. The recommendations, however, did not change other than where the references were located within the report.

The Chair thanked Councillor Jones and the finance team for all of their hard work in addressing the Council’s financial position. He labelled the current budget as a fake budget, with the inclusion of ridiculous savings targets and plans to deliver them. He made it one of the new administration’s top priorities to fix the mess that had been inherited from the previous administration.

Councillor Coe, Cabinet Member for Environmental Services, said that legacy issues such as ignoring the audit, not allocating enough money towards social care, and not repaying any of the accumulated debt had caused the issues that faced the Council. He wished to pay thanks to the officers particularly within his Cabinet portfolio for the savings that they had been able to make.

Councillor Price said that the report stated that improvements had been made to the Prop Co governance at the Council and she wished to understand what specifically had occurred. Additionally, she said that what had been revealed over the past few months was that robust processes had not been in place,  ...  view the full minutes text for item 6