Agenda item

The Director of Finance submits a report that sets out the Council’s financial performance against its revenue budget in the financial year 2016/17. The Overview Select Committee is recommended to consider the overall position presented within this report and make any observations it sees fit.

The Finance Task Group met 15 June 2017 to consider the reports included in the agenda, and the minutes of that meeting are now available and attached.

The Director of Finance submitted a report which set out the Council’s financial performance against its revenue budget in the financial year 2016/17.

The Chair commented that this report, the Capital Budget Monitoring Report and the Income Collection Report had all been considered by the Finance Task Group and the minutes of the meeting had been previously circulated.

The Director of Finance introduced the report and explained that Local Government, including Leicester City Council was in a difficult financial position because of the significant pressures it faced, particularly in Adult Social Care and Children’s Services. in Leicester, Directors had worked hard to keep spending within budget and in some areas they had managed to keep spending under budget, due to the early delivery of efficiency savings.

Members considered the report and raised comments and queries which included the following:

Delivery, Communications and Political Governance

·         It was noted that as part of the saving of £1.09m achieved by the Delivery, Communications and Political Governance Division, there was a transfer of £107k to the elections reserve. The transfer was due to the implementation and timing of the June General Election.

·         A Member commented that £250k from the Financial Services underspend was being transferred to the channel shift reserve and it was questioned as to how the project was going.  The City Mayor responded that the council were trying to make it easier for members of the public to make contact with them, but investment was needed to implement the programme.

Adult Social Care

·         A Member pointed out that approximately 93% of the Adult Social Care (ASC) budget related to expenditure on independent sector service user care package costs and questioned the predicted forecast for 2017/18 and whether this was likely to increase.  The Director of Finance responded that when setting the budget, officers looked at trends in national figures, while also forecasting around people’s individual circumstances. In Leicester, people younger than the national average, were receiving care packages and people were deteriorating faster than the national average. The budget was a prediction based on the best information to hand, and it was believed to be sufficient.  The City Mayor added that there were pressures on ASC throughout the country, with people living longer and needing more support.  The measures that the Government were taking were insufficient and provided a temporary rather than a long term solution to the funding problems. 

·         In respect of the council’s future funding, the Director of Finance explained that Leicester had signed up for a four year settlement up to 2020, as had many other local authorities. The business rate retention scheme had not been included in the Queen’s Speech and there were uncertainties around the funding mechanism for local authorities.  The City Mayor stated that he would continue to strive for better funding for local authorities and in respect of funding for ASC, Councillors and Local Authorities had made many representations to the Government telling them at the funding provided was unsustainable.

·         A Member queried that money from the ASC budget 2016-17 was being transferred to reserves. The Director of Finance explained there had been some underspend in that particular budget because some of the initiatives implemented to improve efficiency, had been delivered earlier than planned. This had led to a one off saving, some of which would be transferred into managed reserves.

Public Health and Sports Services

·         A Member questioned whether there would be a budget in a few years’ time to deliver services and to provide the physical and mental stimulation to help people to care for themselves. The City Mayor responded that the Council had been working to enable this and for example, the Deputy City Mayor had that afternoon been working on issues around tackling obesity.  The Director of Finance reported that some Local Authorities were calling for a lessening of the mandatory services that they were obliged to provide, as issues varied according to the demography. Views were being expressed that each Local Authority was better placed to decide what issues it needed to address.

·         The Chair of the Heritage, Culture, Leisure and Sport (HCLS) Scrutiny Commission expressed concern that without appropriate facilities, people would not be able to explore opportunities for improving their health and wellbeing.  Although the HCLS Scrutiny Commission did not have a remit for public health,  it would look at this issue as part of the sports remit of the Commission.

Education and Children’s Services

·         Concerns were expressed relating to the costs of external placements for looked after children (LAC), and it was questioned whether the most effective way of helping children and young people, was by sending them out of the city. The City Mayor responded that he had spoken to officers about the out of city placements and suggested that it would be very helpful if the Children, Young People and School’s Scrutiny Commission explored this issue to see whether it was in the best interests of the child and also the City Council budget.

·         Queries were raised relating to the costs of agency social workers and whether actions could be taken to minimise those costs. Members heard that this problem was not unique to Leicester as not everyone wanted permanent employment. There could also be fewer pressures on agency staff than those compared to permanent staff, as it was easier to leave and seek alternative placements. The Director of Finance commented that she had been assured that agency numbers were decreasing. Leicester had a strong commitment to ‘growing their own’ social workers and was recruiting newly qualified social workers from local universities. Those who were newly qualified were working alongside very experienced colleagues. The Director of Finance said that she would ask the Strategic Director, Children’s Services to provide a briefing note for Members, on the issue.

Corporate Items

·         The Chair reported that the Finance Task Group had supported the proposal to make a contribution of £7.4m from the under-spend on corporate budgets and housing benefits, to the Economic Action Plan. (EAP) This was to develop and promote the assets of the City. He questioned the possible schemes the funding would be used for. 

The City Mayor responded that this proposal would enable economic development in the City, in a way that would not disrupt the capital and revenue budget while at the same time, utilising savings achieved from the under-spend.  Schemes had included the Haymarket bus station and the New Walk Centre project. Several hundred jobs had been created from such economic development and projects had led to private sector investment. The City Mayor offered to bring a presentation to a future meeting of the Committee. The Economic Development, Transport and Tourism Scrutiny Commission had received several presentations on the EAP had been very supportive.

The Chair concluded the discussion on the Revenue Budget Monitoring Outturn and asked Members to note the recommendations. The City Mayor suggested that it would be helpful to seek a view on the proposal to use the under-spend as discussed to make a contribution of £7.4m to the EAP.  This proposal was moved by the Chair and seconded by the Vice Chair and subsequently agreed by Members.

AGREED:

                   that it be agreed:

1)    that the proposal to use the under-spend on corporate budgets together with the housing benefit under-spend to make a contribution of £7.4m to the Economic Action Plan be supported; and

2)    that the overall position presented within the report be noted.