Cabinet considered the latest financial update. The Lead Member highlighted that at this early stage in the financial year, reserves at year end were anticipated to be £7.3m, comfortably above the recommended minimum of £5.8m. A number of pressures had emerged:

·         Home to School transport costs were set to increase despite the significant additional budget allocation of £300,000. The current expectation was for an overspend of £226,000 at year end. However this would be reviewed when the new academic year began.

·         A £602,000 overspend was predicted in placements for young people with demanding circumstances or disabilities. The cost per placement could be very high therefore the overspend related to a relatively small number of young people.

·         Legal costs related to the number of children moving into care were likely to result in an overspend of £162,000.

There continued to be a cost related to agency social workers. It was the council’s intent to rebalance the situation, despite success this was taking time. By October, seven individuals would have completed their training and would become newly qualified social workers as permanent employees.

Adult social care income was showing an underspend of £484,000, mainly due to three successful continuing healthcare claims where health was now responsible for costs of the individuals. The £153,000 allocated to secure the continuation of a number of bus services that had become commercially unviable would be fully offset by income from registrars and parking charges.

The Lead Member explained that £78m would be added to the borrowing requirements in addition to the previous borrowing of £50m. This was still well below the likely capital receipts from the regeneration programme.

The Lead Member for Children’s Services explained that recent reforms raising the placement age to 25 had impacted on budgets as no additional funding had bee provided. A number of young people had come into care with complex needs that did not suit the typical foster care setting. Placements could cost up to £5,000 per week as the market was limited. The team was working to identify savings to bring the budget in line. From 1 August 2017 the council would be working with Achieving for Children on placements and would therefore be more competitive when approaching the market.

Councillor Jones asked if there were any other risks that might require increased borrowing above the forecast for March 2018. The Lead Member responded that all issues that affected the cash flow were on the council’s radar. The item in relation to the Pension Fund situation in Part II was unlikely to have a material impact on borrowing needs in the current financial year.

The Chairman referred Councillor Jones to the Part II outline business case item in the Cabinet Regeneration Sub Committee meeting earlier in the week, that set out the payment profile for the four Joint Venture sites. There would undoubtedly be a lag in the retirement of required borrowing.

The Lead Member for Culture and Communities thanked the Superintendent Registrar for the £33,000 saving that had been identified.

The Chairman commented that this was the last meeting before the council completed its investment in Achieving for Children. He thanked all officers and the Lead Member for their work in getting to this point. It was a wonderful opportunity for staff. He also thanked the Leaders and Members of Richmond and Kingston councils, and the staff of Achieving for Children.

RESOLVED UNANIMOUSLY: That Cabinet:

i)             Notes the Council’s projected outturn position for 2017-18 and mitigating actions to address service pressures.