Cabinet considered the latest budget monitoring report.

The Cabinet Member for Asset Management and Commercialisation, Finance,

and Ascot  informed that we are early in the budget year and at month 2 outturn forecast was a pressure of £1.743M which is roughly where we were in month 2 last year.

Place Directorate reports a pressure of £1.387 M, comprising a parking shortfall of £600K and lost parking season ticket income is forecast to be £500K which demonstrates that working patterns have changed. 

However Windsor car parks have been full with a big boost from the Jubilee celebrations. So, next month’s parking figures will be interesting but increasing the take up of season tickets will be challenging but worthy of some thought.

There were pressures in Adult Social Care with higher numbers of clients in domiciliary, residential and nursing care which has triggered the release of £750K demographic contingency. Our excellent ASC team will not sit on their hands and were working on projects in both domiciliary care and residential and nursing care.

Children’s Services report a projected overspend of £360K. There were increased legal fees and the net impact of the national transfer scheme for 15 additional unaccompanied asylum seekers will cost AfC £238K which was unbudgeted.

There were some other pressures including a significant overspend by the tree team and a forecast overspend on the Tivoli contract where we are told negotiations could add to budget pressures.

Libraries and residential services were forecasting an underspend of £52K but is the first service to report the negative impact of energy costs with a £46Kpressure.

As a consequence of the delay in implementing IFRS16 (International financial reporting standards) a virement is requested of £202K from capital to support revenue budgets. IFRS16 has the impact of moving leasing costs onto the balance sheet. 

On capital, Property services budgets have been reprofiled and as a consequence a variance of nearly £500k has been identified where schemes are complete and slippage from 2021/22 to 2022/23 will not be required allowing external funding to be use on alternative future schemes. 

This is a forecast and the best estimates of officers on the outturn.  Finance work with officers but it is difficult to calibrate their judgement, some will be more optimistic than others so this cannot be accurate. To use a sporting analogy in the first lap of a 5000 meter race where one cannot predict the winner.

Mr Bagley addressed Cabinet and said there was a concern that there was an  overspend predicated at month two and asked if Cabinet were confident this could be controlled given the increase in energy prices and increasing inflation.  He made reference to the parking figures not meeting target and asked if the one hour discount was an element and if they regretted this and if there would be a review.   He asked if there were any clear data regarding the impact of the jubilee figures and what was being done regarding the £13 million SEN deficient on the DSG.

The Chairman replied that this was only the month 2 forecast and that he was confident that at year end they would be on budget if not under, he gave the example of the position at the same time last year where there was also a predicated overspend that resulted in a £3million underspend.  He was confident that at year end the budget would be balanced.  With regards to the parking discount he said he did not regret the policy and it would be rolled out further when financially appropriate.

The Cabinet Member responsible for Finance reported that the MTFS accounted for inflation and the current financial situation.  With regards to the DSG he said that this had been discussed and a plan approved by the Schools Forum to deal with the issue.  Plans were in place and negotiations were ongoing with the government about this national issue, it was too early to comment on the success of the approved remedial actions.

Mr Hill addressed Cabinet and said that this was the first admission that parking income from season tickets was a problem.  Back in January Mr Wilson had asked if the Vicus Way car park was still viable, the then lead member said it was and Mr Hill questioned if this was still the case.  Mr Hill also question the additional borrowing and asked if this was new and if so what were the big ticket items.

The Chairman replied that with regards to Vicus Way the project was still on budget and on time and would provide valuable long term parking, especially when the Elizabeth Line was fully operational.

Cllr Baldwin said that he understood that the figures were only forecasts but it was a grave situation to be forecasting such a large overspend so early in the year.  Parking income was down by £600,000 and the mitigations given such as the Jubilee included  two bank holidays when parking was free.  Season tick sales had collapse and he could only see this position getting worst and not better.  He was also concerned that the  arboricultural team was overspent when the contract had only been signed in April. 

The Chairman said that this time last year there was a predicted overspend that resulted in a year end underspend.  There were not being complacent but they were confident that the budget would be on target again. 

The Cabinet Member for Finance said that with regards to the arboricultural team this was an example how an issue has been identified and with adjustment would be brought back on track.

Cllr Del Campo raised concern about the DSG and although there was a five year recovery plan in place the deficit was increasing and could end up at £2.5m.  it was time to accept that the savings were not working, the council could claw the money back from schools and invest on early intervention so there would be reduced demand on high cost SEN placements.  She requested that the director look into this and report back.

The Lead Member informed that the Schools Forum had only agreed their recovery plan two months ago so it was too early to say it was not working.

Cllr Jones mentioned that last year there were a number of one off grants that supported the budget, we could not expect that the same would happen this year so she asked what plans were in place.  She also asked what was being done about borrowing, were we moving funds from short to long term borrowing.  With regards to parking she asked if there was data to back up the forecast. 

She was informed that table 14 showed movements within the year and that the Treasury Management Strategy showed that there was £20 million moved over 10 years.  Funds had been put into our reserves that could be used to cover one off payments if required as a last resort.

Cllr Price addressed Cabinet and said that within the report there were several mentions of posts not being filled, she asked can we be assured that the inability to fill these post would not impact service delivery or the delivery of the corporate plan.  She noted that without recruitment certain savings would not be achieved and it seemed that more staff were leaving coupled with recruitment difficulties.  She asked what steps were being taken to prevent a drop in service delivery and the delivery of the Corporate Plan. 

The Lead Member replied that £850k had been added to the budget last year to aid the recruitment of key posts and most had been filled.  Cutting staff was not a road to successful service delivery and a lot of work was being done on recruitment.  The Director for Resource highlighted some success in recruitment such as the finance team and mentioned that other options were considered such as grow your own. 

The Chairman reiterated that this was early days into the budget and although there were pressures and challenges ahead he was sure, as per last year, the final year end position would be on target.

Resolved unanimously:  that Cabinet:

i) Notes the forecast revenue outturn for the year is an overspend on services of £1.743m but there are sufficient funds to meet this from contingency if required (para 4.1);

ii) Approves one budget virement in respect of revenue expenditure funded from capital (para 12); and

iii) Notes the forecast capital outturn is expenditure of £56.189m

against a budget of £56.971m (para 14).