To consider the report of the Portfolio Holder for Finance.
Minutes:
Documents:
· Financial Overview and Forecast, September 2019
Discussion:
· Some Members reported difficulties in accessing the reports provided in a new way. It was also noted that they were unable to highlight sections of the report or add sticky notes. These issues would be taken up with the relevant officers.
· Reports had only been made available the evening before the meeting due the necessity of the reports being published for Cabinet prior to Finance Panel being able to access them. This did not allow sufficient time for preparation or for comments to be made.
· The projected overspend at the end of September is £3.398M
· £12.5M of savings have been achieved with a further £9.17M to be achieved during the remainder of the year. Of this, £3.5M is expected to be delivered by year end.
· The assurance level has dropped significantly since the last report mainly due to Children’s Services reporting unachievable savings of £2.6M. This is being challenged at a corporate level.
· Based on the current position It is projected that a balanced budget will be deliverable at year-end, the level of flexibility in achieving this position has been reduced.
· Adult Social Care Pressures estimated at £9.5M had been estimated at the start of the year. £3.9M of these have materialised to date. It was recognised that there may be more pressures materialising, but it would not reach the level estimated at the beginning of the year. This could be influenced by the level of winter pressures in the coming months. Members noted the collaboration that took place between the Health Board and Authority to relieve last year’s winter pressures and it was hoped that this would happen again. Additional money had been granted and this had been shared between the two bodies. There were no guarantees of additional funds in the current year.
· The Panel noted that £2.7M had been mitigated by there being no uplift to providers and this had been identified as a risk. How often are such risks reassessed? Risks were continually reviewed. There is also a heat map of fragility and the service has much more detailed evidence including that of unmet demand.
· Further detail was requested regarding the increase in undeliverable savings within Children’s Services – this has been requested. Under new procedures, any Head of Service not achieving savings are required to provide a detailed briefing. The Panel asked if these briefings could be shared with them.
· The current focus for Children’s Services was to provide improvement and not on finance. At some point the service must balance their budget. It was noted that the Chair of the Improvement and Assurance Board had made a point that improvements in some areas of the Council may impact on other areas. The Improvement and Assurance Board has also taken on Education following a recent Estyn Inspection.
· There was concern that the Council was led by the Improvement and Assurance Board and yet they were not accountable to anyone within the Authority. A suggestion was made that the Chair of the Board be invited to Finance Panel. The Portfolio Holder reminded Members that the Chair was answerable to the Minister and that the Board did not control the finances of the Authority which were set by Cabinet and Council.
· The Head of Finance reminded the Panel that there had been a level of risk accepted when the budget was agreed with £2M being set aside for contingencies outside the level of reserves that had been planned.
· Children’s Services have had an increase in budget of 60% in the last two years and Members were of the opinion that improvements should be showing
· Deliverability of the budget remained a concern as the more that was allocated to education and social services, remaining services would have to contract. Comparators with other Welsh Authorities show that Powys spends considerably more per head on Social Services and Education, at gross level, was the highest funder in Wales.
· It seemed that the Welsh Government had insufficient confidence in Powys running some services and greater emphasis was needed to improve
· It had been recommended that budget managers should all receive financial training. Despite a slow start, it was confirmed that all managers within Childrens Services have now completed this training.
· It was suggested that there had been significant cuts in preventative services over recent years which could be exacerbating the demands on Children’s Services, and that a review of preventative services should be undertaken. Impact Assessments should have addressed the impact of removing some services or consideration should have been given to using transformation funds to transform preventative services.
· The main areas to note within the report are the overspend in Children’s Services and an underspend in Finance which is attributed to slippage in the capital programme
· Reserves are maintained at slightly more than 3% as required by the approved policy
· The schools’ position has not changed but the level of deficit projections remain a cause for concern. Twelve warning notices have been issued – some schools are taking corrective action, but others are finding it difficult to reach a balanced budget. Levels of funding are making it increasingly difficult to deliver appropriate levels of education. The Panel questioned whether the new Funding Formula was working effectively. The issue is with the number of schools which has been acknowledged at a senior level. It was suggested that the Funding Formula may need minor adjustments to deal with the current situation – the Formula is reviewed annually.
· The level of historic debt was a significant risk. These sums could not be written off and the level of provision should not be disrupted. However appropriate repayment is necessary, but it was acknowledged that the current position needed to be stabilized first prior to repayment. The Panel reiterated that schools should not be shown as having a ‘green’ RAG status when there were underlying challenges.
· Projected capital receipts of £6.5M were shown with £3.7 being budgeted to be utilised. Some property disposal receipts had been brought forward from previous years – the forward budget plan includes £2M per year. This is reviewed on an ongoing basis.
Outcomes:
· Heads of Service reports regarding explanations of overspends would be made available to the Finance Panel
·