To consider the report of the Head of Finance.
Minutes:
Documents
· Report of the Head of Finance
Discussion:
· The Panel had been concerned regarding the level of undeliverable savings
· The report will also be considered by Audit Committee
· Of £21.69M of proposed cost reductions, £14.95M had been achieved, £5.6M avoided and a further £1.3M expected to be delivered by year end
· Some reductions cannot be achieved, and the report provided a breakdown of those reductions together with an explanation of why they could not be achieved
· Where budget gaps remained, it had been recommended that the budgets be reinstated where those reductions could not be delivered. Budgets would be amended, and the unachieved reductions written out at service level
· The Panel had also been concerned at the quality of impact assessments. These had been reviewed and it was found that the assessments focussed on residents and communities rather than implementation. It had been recognised that the quality of the impact assessments was not as robust as it could be. More rigour had been applied as part of the 2020/21 budget process. Senior management will review impact assessments again and look for further improvements to the process.
· A cost reduction is a proposal to reduce budgets by a specific action. A cost avoidance is mitigation to avoid pressures such as demand in social care. An unfilled post would be a cost reduction.
· The Portfolio Holder for Finance reminded Members that setting the 2019/20 budget had been a difficult process with some savings not being identified until the last moment. The impact assessments were acknowledged to be inadequate in these circumstances. A new more rigorous process had been implemented which included Integrated Business Planning. There was more confidence in this year’s budget and the Portfolio Holder had expected it to be delivered prior to the outbreak of the Covid 19 pandemic.
· The reasoning given for non-delivery was given as over ambitious or unrealistic. The Panel recalled that comment had been made regarding the impact assessments were not detailed enough or had not been completed at all. The Panel sought assurance that this would improve, and a similar situation be avoided.
· Concern was expressed that Heads of Service were not being held to account for failure to deliver cost reductions. The impact of non -delivery is carried forward and ultimately lead to further cost reductions. The issue of accountability was one that would be discussed with the Chief Executive.
· The Chair questioned whether activity around the Improvement and Assurance Board had impinged on some service areas’ ability to achieve cost reductions. The Portfolio Holder confirmed that this was not the case and that the Chair of the Board had always emphasized that it was up to the Authority to set a balance budget.
· It had been apparent by the end of the first quarter that Children’s Services were likely to be overspent by year end. The budget was not thought to be adequate and this has been addressed in the 2020/21 budget. Had there been greater investment in early intervention some years ago, the current situation may have been avoided.
· It was suggested that the monthly outturn reports should have more detail around how potential overspends were to be dealt with.
· Budgets were a responsibility of the whole Council.
· The Panel had previously commented that budgets were skewed with those in comparator counties. It had been hoped that the new process would allow these issues to be resolved by taking a more holistic view. It was expected that Integrated Business Planning would be key in delivering this.
Outcomes:
· The Chief Executive would be informed of the Panel’s concerns regarding accountability and an invitation to attend a future meeting would be extended
Supporting documents: