Agenda item

Financial Update

Minutes:

The Lead Member for Finance and Economic Development introduced the latest Financial Update report.

 

The Lead Member informed that he had presented the latest financial update and the associated background to the report to Members from all parties and to the appropriate scrutiny panels.

 

Cabinet were informed that the financial update reports had shown that since July 2018 there had been early pressures on the budget mainly due to the increased demand and cost of children in care, pressure on parking income and recovery of . debt from revenues and benefits.  It was reported that there would be a NET pressure of around £1.5 million. 

 

The budget position was being driven by national pressures.  The current pressures were being partially mitigated resulting in a net service pressure of £3,044,000 along with an additional £1,500,000 from the Business Rates Pilot, leaving a financial pressure across the Council of £1,544,000 as detailed in appendix A.

 

The Lead Member informed that at the Corporate Services O&S Panel Cllr Brimacombe had used the analogy of a graceful swan swimming across the lake whilst paddling franticly below the water. The report provided additional appendices detailed what had occurred ‘bellow the water’ and actions taken to get to the current financial outturn position.

 

With regards to children in Care the Lead Member for Finance and Economic Development informed that an additional child entering the system could cost between £50,000 t over £150,000 per year. In forecasting the year end position it had been assumed that the national and local increase in demand and cost would continue. 

 

The Lead Member also informed that the other major area of pressure was the projected income from parking.  When setting the budget the Lead Member had informed that there had been a policy decision not to increase parking provision for local residents but ,after benchmarking, to increase parking charges proportionally for visitor parking.  What had not been expected was that there would be a shift in an increase of resident parking and thus a corresponding drop in projected income due to increased use of the vantage card. 

 

Officers were asked to provide a range of realistic mitigating actions which had also been appended with a matrix of delivery risk.   There were also additional funding opportunities such as higher than expected revenue from Business Rates Pooling.

 

The Council’s aggregated usable reserves remained in a healthy position at £8,545,000 (10% of budget) which was in excess of the £5,860,000 (6.87% of budget) recommended minimum level set at Council in February 2018.  The Lead Member reiterated the report’s recommendations and informed that the projected trends would be taken into account when setting next year’s budget. 

 

The Chairman informed that there would be an additional £1.29 million Adult Social Care  funding allocated to next year’s budget.

 

The Leader of the Opposition reported that back in 2015 she had raised concern about the rising costs of adult social care, children social care and the increased demand.   Yet the budget remained stagnant and council tax was reduced going against the national trend.  There was a national trend that budget planners should have been aware of and taken into account when setting the budget.  The Leader of the Opposition raised concern about next year’s budget, especially as a number of the mitigating actions were one off savings.

 

The Chairman replied that it was for Members to set policy and for officers to manage the budget, accountability and budget management will be an important consideration when selecting the new Managing Director. 

 

The Lead Member for Finance and Economic Development informed that there had been two large budget variances during the year that had to be dealt with.  With regards to the pressure from children in care the report contained an additional appendix that showed that officers felt that there was a decline in demand as forecasted by using three years of data.  When setting the budget they were looking at a downward trend and did not budget for the increased demand. 

 

The Chairman mentioned that when setting the 2018/19 budget there was an increase in council tax of 1.9% and the adult social care levee of 3%.  If the data that there was going to be an increase in demand had been made available at the time of setting the budget then council tax could have been set at a higher rate with a 2.9% increase.  If the right information had been put before Members than a different budget would have been approved.

 

The Lead Member for Adult Social Care and Public Health informed that with regards to demands in adult social care all avenues at his disposal had been used to help meet demand.  He had contacted central government about the need for additional funding and mentioned that by increasing council tax puts more pressure on our residents with low incomes.

 

The Chairman mentioned that over 70% of revenue was spent supporting venerable members of our society.  The Royal Borough had a vibrant economy and a high tax base and this provided use some resilience.  There were both local and national issues impacting the budget and we could solve the local issues.

 

The Leader of the Opposition requested and it was agreed to take mitigating action in children’s services to the Children’s Services O&S Panel.  She also mentioned that she had comparative data with other authorities that showed that although we above other in regards to maintained reserves we were also low down with regards to spend. 

 

The Chairman said that the administration did not wish to increase council tax when there was no evidence that it was required, he would rather leave money with the tax payer rather than sitting in the council’s bank account.

 

The Lead Member for Finance and Economic Development mentioned that the local press had asked him why the administration did not continue to increase council tax over the last ten years, when was it reduced when it could have been increased and added to reserves.  This was a view mirrored by the opposition.  Cabinet were informed that the council was a revenue based organisation that had a reliable income base so there was no need to steal from our residents to protect ourselves.  We tax residents when it is required and maintain a healthy level of reserves. 

 

The Leader of the Opposition said that they had had never said that council tax should be increased but that it should be maintained at was then the current level rather than having it reduced. 

 

The Chairman said that the Residents Satisfaction Survey showed that we had a 65% value for money satisfaction rating compared to a 45% rating nationally.  The Royal Borough had the lowest council tax rates outside of London, the administration ran a tight ship as it was our residents money. 

 

The Lead Member for Highways, Transport and Windsor mentioned that the Royal Borough was in an excellent financial position when compared to many other authorities across the country, yet we still provided what our residents expected such as weekly waste collection.  Other authorities were looking at £20 million to £30 million pressures whilst we had a £1.5 million pressure.  We were transparent with our residents and doing a good job.  The Chairman said that 88% of our residents were happy with waste collection.

 

The Lead Member for Finance and Economic Development replied to the Leader of the Opposition that if Council Tax had been maintained over the past few years and not reduced than our tax payer would have paid 5-10% more.  At least £25 million of addition tax would have been collected from our residents that was not required.

 

The Leader of the Opposition said that there was a £7.4million overspend that had been mitigated.  We were looking at the same pressures next year.  She felt that the administration could have done better.  The Chairman replied that in certain areas thing could have been done better, however this administration delivered value for money and did not squander council tax payers money. 

 

Resolve unanimously:  that  Cabinet:

 

i)     Notes the Council’s projected outturn position for 2018-19 and notes work undertaken to identify mitigations to deal with pressures.

ii)    Approves a capital budget of £50,000 to fund the Eton Brook and Barnes Pool restoration project. See paragraph 3.2.

iii)   Approves an additional grant funded budget of £476,500 for Adult Social Care Winter Funding 2018-19.  This grant has been awarded from the Department of Health and Social Care to the Council to alleviate winter pressures on the NHS, getting patients home quicker and freeing up hospital beds. See paragraph 5.18.

 

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