Agenda item - Targeted Budget Management (TBM) 2016/17: Month 9

Report of the Executive Director for Finance & Resources (copy attached).

101.1  RESOLVED: That the Committee agreed –

(1)  To note the forecast risk position for the General Fund, which indicated an in-year pressure of £0.428m. This includes a forecast overspend of £0.233m on the council’s share of the NHS managed Section 75 services.

(2)  To note that total risk provisions of £1.384m remain available to mitigate the forecast General Fund risk if the risks cannot be completely eliminated by year-end.

(3)  To approve the establishment of two reserves as set out in paragraphs 6.2 and 6.3 of the report.

(4)  That the Committee note the forecast for the ring-fenced Housing Revenue Account (HRA), which is an underspend of £0.430m.

(5)  To note the forecast risk position for the ring-fenced Dedicated Schools Grant which is an underspend of £0.261m.

(6)  To note the forecast outturn position on the capital programme and approve the variations and slippage in Appendix 5 and the new schemes and future years’ variation in Appendix 6.

101.1  The Committee considered the report of the Executive Director, Finance & Resources on Targeted Budget Monitoring. The report set out an indication of forecast risks as at Month 9 (December) on the Council’s revenue and capital budgets for the financial year 2017/18.

101.2  Councillor Wealls asked for more information on both the temporary accommodation overspend, which had been driven by the higher than forecast volume of spot purchasing, and the ongoing pressure of voids and repair costs which had been the result of more households moving into permanent accommodation. The Executive Director Neighbourhoods, Communities and Housing said that spot purchasing was higher, which was a result of having a higher than normal decant of around 180 properties which had come to the end of their lease. In addition Kite Place had been delayed and so there were people the council were hoping to move through temporary accommodation that they weren’t currently able to. The increase in people needing accommodation had reduced by around 40%. The Council were no longer entering into long leases in the hope to reduce the need for temporary accommodation in the longer term. Universal credit had added to the budget pressure, and there were currently 66 households in temporary accommodation who were all in receipt of universal credit and were all in arrears. The arrears in total were £90k, which was a significant amount.  

101.3  Councillor Wealls asked if the large decant were not foreseeable when the budgets were drawn up. The Executive Director Neighbourhoods, Communities and Housing said it wasn’t, as the decant had been quicker than anticipated.

101.4  Councillor Sykes referred to Children’s Safeguarding and Care, and asked why the average cost of ‘demand-led, secure accommodation’ had increased so substantially and who was supplying the service. The Executive Director Families, Children & Learning said there no in-house placements, so external providers had to be used, and the change to costs related to the increased duty to care leavers up to the age of 25 which meant the council was having to access more accommodation than previously. 

101.5  Councillor Sykes noted the income generated from hoarding, which was a result of a Green Group amendment to last year’s budget, and was pleased that the cost had not suppressed the market.

101.6  Councillor Sykes referred to the internal audit of Adult Social Care, which had raised some issues with care providers in terms of the monitoring of the placements and their costs. He accepted it was an on-going matter but asked if there was any clarity following that audit report. With regard to the TBM he noted there was £2m worth of savings, or underspend, associated with vacancies, with £600k worth of vacancies within Adult Social Care Assessment. He accepted savings were being made, but asked if there were not a risk to service users and a financial risk in not providing those services. He suggested that Brexit may be having an impact on recruitment.  The Executive Director Health and Adult Social Care audit report said that the issues raised in the audit report were being taken forward. With regard to the vacancies, there had been challenges in recruitment and agency staff had to be used. There was a new recruitment programme in place, which would hopefully increase placement into permanent posts. The Executive Director Finance & Resources said that there were a number of reasons for vacancies, one was that many services were in a perpetual state of redesign, and if a department had to meet a budget saving and there were a vacancy near to the end of the financial year, the post may not be filled if it was known there wouldn’t be the budget for that post in the following year. He agreed that it was necessary to consider the risk of such vacancies, and that could be part of the conversation for next year’s budget.

101.7  Councillor Mears referred to temporary accommodation, and said that the old housing office in Oxford Street was due to be used for temporary accommodation but the delay in opening it was impacting on provision. The Executive Director Neighbourhoods, Communities & Housing said there had been delays with the premises in Oxford Street, but it would be used to provide temporary accommodation in due course.

101.8  Councillor Mac Cafferty noted the increase in National Non Domestic Rates (NNDR) bill for New England House. The Head of Finance said there had been an increase in NNDR on a number of Council buildings, and those costs had been built into the budget for next year.

101.9 Councillor Mac Cafferty referred to the Housing Strategy and asked why there had been lower spending than expected on the Transfer Incentive Scheme. The Executive Director Neighbourhoods, Communities & Housing that the scheme was demand led, and there had been fewer transfers than expected.

101.10 Councillor Mac Cafferty asked why there had been an overspend on the development of Brook Mead. The Executive Director Economy, Environment & Culturesaid that some items such as Wi-Fi, furniture for communal rooms, automatic doors etc. had not been included in the original scheme. However, those costs had been offset by money received from builders, so the development actually came in under budget.

101.11 Councillor Janio referred to Children’s Safeguarding and Care and noted that every year the cost of demand-led residential agency placements was under predicted, and asked if work was being undertaken to address that. The Executive Director Families, Children & Learning, said that there had been a reduction in the number of children in care and there were now 410, down by around 50 in the last twelve months. However whilst the number had reduced, the costs had increased for two reasons. Firstly the level of care needed, particularly for teenagers, had increased significantly and secondly, there had been an increase in the number of children in care nationally, and there were insufficient places to accommodate them and so the cost had increased. The Council were in discussion with neighbouring authorities to try and manage that market more effectively to address the costs.

101.12 Councillor Janio referred to the capital expenditure profile for the Shelter Hall, and asked if the funding stream for the additional £7m could be explained. The Deputy Chief Finance Officer said it would come from the Local Transport Plan capital grant, capital receipts and supported borrowing. The Executive Director Neighbourhoods, Communities & Housing said a report would be coming to both Environment Transport & Sustainability (ETS) Committee and Policy Resources & Growth (PRG) Committee where the full spend would be outlined. Council Janio was concerned that there would be an overspend, and asked that better costings be made for projects in the future as officers were continually asking PR&G Committee for more funding. Councillor Mitchell said that when the original bid for funding for Shelter Hall was submitted the full scale of what was going to be found was not known. The project was amazingly complex, but when finished would be an asset to the city. The Chair added that this was not a standard project, but something quite unusual. Councillor Janio said that the unexpected occurred on most building projects, and so there should be better planning of costs. Councillor Yates said that costs did increase, particularly when a project took a long time as cost inflation would often apply. Councillor Peltzer Dunn suggested it would be useful for officers to set out any potential problems with projects as soon as they were known.

101.13 Councillor Yates referred to the Brooke Mead project and noted that the overspend of 0.4% was off-set by delay damages, and asked where the money from those damages went to.  The Executive Director Neighbourhoods, Communities & Housing said the Council were due to receive £300k of delay damages, some of which have been paid and some would be delivered as part of the final account. Councillor Mears asked if it would go to the HRA account, and was advised it would.

101.14 RESOLVED: That the Committee agreed –

(1)  To note the forecast risk position for the General Fund, which indicated an in-year pressure of £0.428m. This includes a forecast overspend of £0.233m on the council’s share of the NHS managed Section 75 services.

(2)  To note that total risk provisions of £1.384m remain available to mitigate the forecast General Fund risk if the risks cannot be completely eliminated by year-end.

(3)  To approve the establishment of two reserves as set out in paragraphs 6.2 and 6.3 of the report.

(4)  That the Committee note the forecast for the ring-fenced Housing Revenue Account (HRA), which is an underspend of £0.430m.

(5)  To note the forecast risk position for the ring-fenced Dedicated Schools Grant which is an underspend of £0.261m.

(6)  To note the forecast outturn position on the capital programme and approve the variations and slippage in Appendix 5 and the new schemes and future years’ variation in Appendix 6.