Agenda item

The Director of Finance submits a report providing early indications of the significant financial pressures the Council is facing this year and also providing an update on progress to control costs in demand-led social care budgets.

The Director of Finance submitted the first report in the monitoring cycle, providing early indications of the significant financial pressures the Council was facing this year and also providing an update on progress to control costs in demand-led social care budgets.

The Committee was recommended to consider the overall position presented within this report and make any observations it saw fit.

Key points included:

• This was the first report of the financial year, based on the budget set by Council in February.
• Some pressures continued from the previous year, such as around temporary accommodation with £8.4m overspent, including the use of the contingency budget.  SEND home-to-school transport and disabled payments were also pressures.
• Positives included:
  • Work with Adult Social Care (ASC), where it had been proposed to reduce the budget.
  • The costs of Children Looked After was coming down, which was offsetting transport costs.
  • A VAT refund had been received following a court case this is proposed to be transferred to the managed reserve to support the budget.

In response to comments and questions from members, the following were stated:

• It was clarified that the variance under Housing was so high as it was the forecast figure to the end of the year.  There had been a £45m decision in affordable homes aimed at moving families out of temporary accommodation, however, it was recognised that it took time to acquire properties.  Without mitigation, the forecast overspend would be higher (£13m).  It was hoped that the forecast overspend would come down as more properties were purchased and more families were moved out of temporary accommodation.
• It was clarified that the original budget was the budget as set in February, the current budget was the budget as things currently stood, the forecast was where it was thought the outturn would be at the end of the year, and the variance was the difference between what the forecast and current budget.
• Housing would be a pressure area next year.  The Housing department had done a report on this area.
• In response to a query about the costs involved with buying houses to reduce pressures around homelessness, it was clarified that there had been a mistake in the capital report on how much had been planned to spend.  It was further clarified that there was a plan to spend £10m this year of the £45m decision and this would progress as soon as possible.  It was a difficult housing market, but the team were working hard to identify properties.  The Director of Housing would clarify costs and the Committee could consider the issue.
• It was clarified that all people coming to the city for housing, must have a local connection based on family or work for over a year.
• With regard to pressures from Section 21s, increased numbers of asylum seekers and prisoners released early going into temporary accommodation, it was acknowledged that this would be an issue, but early indicators suggested that these were relatively small number.  The Director of Housing could also update on this.
• It was clarified that what was not spent of the £45m would earn interest in the Council’s bank account.  The managed reserves would be used to manage the overspend.
• A property was mentioned that could be considered for purchase and was being considered by the department.
• In response to a query surrounding SEND transport and respite care, it was clarified that with regard to respite care the spend on this was a shortfall of £0.6m with a forecast spend of £2.6m and with regard to SEND transport the forecast expenditure was £17m, £2m more than the budget.  Staff were continually trying to review cases on SEND transport and taxi procurement was a part of this.  Staff looked to ensure there was appropriate transport, and as such personal budgets were also considered for families.  This was a difficult situation and was a pressure nationally.
• In response to a suggestion that SEND transport be brough back in-house, it was clarified that whilst much of it was managed in-house, there were complications in doing this as many children were out-of-area and also off bus routes.  Suggestions from members on how to manage the issue were welcomed.
• It was suggested that if personal budgets were increased, it might make the option more attractive and thus enable children and young people to be more independent.  The Director of Finance agreed to consult the relevant department to see which recommendations were being considered and the progress made on them.
• There was an ongoing conversation with the Department for Education around the recovery plan.  Once more information was available it would go to the relevant Scrutiny Commission for consideration.
• It was clarified that savings had been made in ASC by making use of technology and preventative care.
• In response to concern raised about the difference between the forecast and spend on ASC, the Director of Finance noted that £8.4m had come through quicker than expected and work was going on between departments to improve that position.  Late announcements regarding issues such as government grants could not be accounted for.  The budget had been set with the best information available at the time that the budget was set.
• The City Mayor added that there had been good planning and management, but risk was still present.  It would be necessary when looking at next year’s budget to assess how precarious the situation was.
• The Director of Finance further clarified that the reserve position had improved, however, the additional one-off transfer would not offset the budget gap and it was not expected to cover the budget gap in the next financial year.
• With regard to the sale of assets, the City Mayor clarified that the ability to use income from the sale of assets to prop up the revenue budget was dependent on government permission, and permission would only be forthcoming is sustainable cuts were made in the revenue budget.
• In response to concern raised about proposed changes in council tax support and issues surrounding briefing for Councillors on the issue, it was acknowledged that there had been technical issues at the briefing, however, the current scheme was well understood by officers, and it was necessary to help people understand why the system was proposed to change.  Further briefing sessions were offered to Councillors.
• In response to a request that the process for changes in council tax support to be delayed to help Councillors understand the issue before it became a document for public consultation, it was explained that whilst it was acknowledged that it was a complex issue and members had a right to understand it, the consultation process needed to take place when scheduled.  However, it was confirmed that a decision did not need to be made January 2025 and this was a Council decision.  It was recognised that there was a need to ensure that members had opportunities to ask questions and express concerns, but there was no need to delay the consultation.
• It was clarified that the proposed changes to the council tax support scheme could save £2.4m through changes to the council tax support scheme.  The scheme was also about making the system simpler so that people could understand it, and when they had income changes, they could re-assess their council tax bill.  This was particularly useful as people could have multiple changes in a year.  It was also aimed to add more discretionary support to help people to transition to the new scheme.
• It was clarified that a proposal had been put to Councillors and the public on a suggested way of running the scheme.  Feedback would then be considered which would inform the decision that would be put before Full Council.
• In response to further suggestions that a delay would be useful to allow people to understand the changes and for the people who wanted to respond to the consultation to understand what they were being asked.  It was confirmed a further Councillor briefing would be offered to answer questions.
• The Chair further clarified that the consultation was about a proposal, not about a decision.
• The Director of Finance reassured the Commission that the scheme was well understood by officers and members would be worked with to help them understand the scheme.

AGREED

1) That the report be noted.

2) That comments made by members of this commission to be taken into account by the lead officers.