Agenda item

The Deputy Director of Finance submits a report to the Overview Select Committee which is the third in the monitoring cycle for 2021/22 and forecasts the expected performance against the budget for the year.

The Committee is recommended to consider the overall position presented within the report and make any observations it sees fit.

The Deputy Director of Finance submitted a report to the Overview Select Committee which was the third in the monitoring cycle for 2021/22 and forecast the expected performance against the budget for the year. The Committee is recommended to consider the overall position presented within the report and make any observations it sees fit.

Amy Oliver, Head of Finance, provided the following information:

·         The current position was in line with the previous position reported to committee, showing an overspend £8.4m.

·         As had previously been reported there was a significant income loss as a direct consequence of COVID, particularly in City, Developments and Neighbourhoods.  The costs associated to the pandemic were manageable within the one-off sums the Council had set aside to support the pandemic.

·         It was noted Adult Social Care were forecasting an underspend of £7million which would be used to offset the overspend in Children’s Services. As an explanation for the underspend, the budget mostly comprised of the cost of packages for the care of individuals.  Each year, the cost increased due to increasing numbers of people receiving services, the changing needs of those already in receipt of packages and the contractual fee increases (essentially the increase in the national living wage and other price inflation). 

·         The Council had used a model for a number of years to set the budgets which has proved robust with actual gross package costs close to budget. The model was based on the trends of cost increases both from the increasing needs of people already receiving care and the growth in numbers newly receiving care.  Unsurprisingly the pandemic had a significant impact on these trends with greater reluctance to access services, in particular during the lockdowns and there were nearly 100 fewer people in residential care at the end of March 2021 compared to the start of the pandemic.

·         The impact of COVID in 2020 had continued into 2021/22. Whilst overall numbers receiving care at the start of 2021/22 was in line with the budget set, there had been fewer package cost increases then previous years and fewer people in residential care.

·         The cost pressures in SEN home to school transport related to the £1million saving built into the budget for 2021/22 in anticipation for a new framework contract being in place with fixed taxi charge rates at a unit rate.  Unfortunately, prior to the contract going live the providers refused to take on the individual contracts awarded at the new framework rate.  Therefore, the Council was left with no option but to abandon the framework.  A new contract was starting from mid-April with existing contracts being honoured until the summer term.  In addition, to the framework being abandoned the unit costs for SEN transport had significantly increased 26% higher than 2020. 

In response to Members’ questions, the following information was provided:

·         With regards to the total overspend of £8million related to one-off costs arising from the pandemic and continued losses of income, but were accommodated with monies set aside at last year’s outturn position. Money from the 2022/23 budget one-off funding had also been set aside as the effects of Covid were still having an impact.

·         The Adult Social Care underspend of £7million forecast was set in Autumn 2020 at which time it was unclear how the pandemic would develop during the remaining months of 2020/21.

The Chair thanked the officer for the report.

AGREED:

1.    That the overall position of the budget be noted.