Agenda item

Finance Monitor Month 2

To include a verbal update to Cabinet on the progress made in establishing the new Slough Children's First company as per the Cabinet resolutions of 15th March 2021, to include milestones in implementing the new model, service improvements and governance arrangements.

Decision:

That the current management position on the 2021/22 accounts be noted as follows:

(a) The forecast General Fund revenue position for 2021/22 as at the end of May 2021 was a £6.907m overspend;

(b) The emerging issues of £33.272m that together with the £6.907m made up the deficit position for 2021/22 of £40.179m as reported in the s114 Notice;

(d) The work being done by all parties across the Council to verify the savings identified in the 21/22 budget and action being taken to mitigate the budget gap in the current financial year by 30/9/21;

(e) The current forecast spend on Transformation to deliver savings;

(f) The Housing Revenue Account (HRA) was forecast to spend to budget for 2021/22 as at the end of May 2021.

The update on the progress of successfully implementing the resolutions of the Cabinet from its meeting held on 15^th March 2021 in establishing Slough Children’s First was noted.

Minutes:

The Section 151 Officer introduced a report that set out the forecast revenue position for the General Fund, HRA and Dedicated Schools Grant as at the end of May 2021, which was Month 2 of the 2021/22 financial year.

The forecast General Fund revenue position for 2021/22 at Month 2 of the financial year was a £6.9m overspend. Taken alongside the emerging financial issues set out in the report of £33.3m there was a current deficit position for 2021/22 of £40.2m. The context of the s.114 notice issued on 2^nd July 2021 and action plan agreed by Council on 22^nd July 2021 were summarised and noted.

The Section 151 Officer explained the work being done across the Council to verify the savings identified for 2021/22 budget and the action being taken to mitigate against the budget gap. The Council had approved a savings programme of £15.6m for 2021/22 at Budget Council in March 2021. Expenditure Control Panels had been established in each directorate to ensure spending restraint and detailed work was underway with each directorate on their savings plans. Lead Members discussed a range of issues including the historic treatment of Minimum Revenue Provision by the Council; the fact that reserves were effectively nil; the future borrowing strategy to move away from an over-reliance on short term borrowing; and the likely timescale to ‘right-size’ the Council over the coming years to balance expenditure and income and ensure its long term sustainable financial position. The Section 151 Officer responded to the points raised, explained the current work programme to understand and address the key issues and stated that further detailed reports would come through to Cabinet and Council from September onwards.

Lead Members asked about the position regarding adult social care given that it formed such a significant part of the Council’s budget. The Executive Director of People (Adults) commented that main reasons for the directorate overspend in 2020/21 were the loss of income from the leisure contract due to the closure of leisure centres during Covid ‘lockdowns’ and the pressures on regulatory services during the pandemic. It was noted that the overspend in adult social care was less than £0.5m which was relatively low in the circumstances. The overspend reported in the current year was due the timing of the savings plans and the work to deliver on the transformation programme for adult social care was summarised. Specific savings proposals would come to come to Cabinet later in the year.

At the conclusion of the discussion on the Month 2 financial update, the Leader emphasised the Cabinet’s commitment and resolve to bring the budget back into balance; address the weaknesses identified in financial management and processes; and take the necessary decisions to put the Council back on a stable financial footing.

The Cabinet also received a verbal update on the progress that had been made in establishing the new model for children’s services – Slough Children’s First. The Cabinet had taken a series of decisions at its meeting on 15^th March 2021 to transition to the new Council owned company and had requested an update to provide assurance that good progress had been made in implementing the new model. The Associate Director, Children and Families updated the Cabinet and highlighted that Slough Children First had started operating from 1^st April 2021 as envisaged. All of the key milestones in place had been achieved. The articles of association and governance arrangements had been put in place and the relevant funding had been approved by the Treasury. A new Chair had been appointed and non-executive directors had been recruited who would be joining the company through the summer period. The recruitment of a permanent Director of Children’s Services/Chief Executive of the company had not yet been successful. Service improvement remained the key priority and it was hoped a positive report would be received following a recent inspection of fostering services. The Cabinet noted the update and welcomed the progress that had been made to date.

Resolved – That the current management position on the 2021/22 accounts be noted as follows:

(a) The forecast General Fund revenue position for 2021/22 as at the end of May 2021 was a £6.907m overspend;

(b) The emerging issues of £33.272m that together with the £6.907m made up the deficit position for 2021/22 of £40.179m as reported in the s114 Notice;

(e) The current forecast spend on Transformation to deliver savings;

(f) The Housing Revenue Account (HRA) was forecast to spend to budget for 2021/22 as at the end of May 2021.

(g) That the verbal update on the progress of successfully implementing the resolutions of the Cabinet from its meeting held on 15^th March 2021 in establishing Slough Children’s First be noted.

Supporting documents: