Agenda item

The Select Committee were provided with an update on the Council’s 2019/20 forecast revenue position and the financial position of the capital programme as at 30 June 2019 (Quarter 1) together with the revised capital programme 2019/24 as outlined in the report. 

The current forecast revenue position for 2019/20 was a projected deficit variance of £3.805m after allowing for approved and pending transfers to and from reserves.  The most significant areas of concern were People and Place, Children’s Services and Community Services & Adult Social Care.  Action was being taken and would continue for the remainder of the financial year to address variances and take mitigating action as detailed in the report.  The overall position was to a limited extent being managed by offsetting favourable variances.  Projects were detailed at Annex 1 to the report.

As the financial monitoring report reflected the financial position at Quarter 1, it could be regarded as an early warning of the potential year end position if no corrective action was taken.  However, management action had been initiated across all service areas to review and challenge planned expenditure and maximise income.  It was anticipated that by the year end, the outturn would be closed to a balanced position and this should be demonstrated in Quarter 2 which would be presented to Cabinet in December and to the Select Committee early in 2020.

Information on the Quarter 1 position for the Dedicated Schools Grant (DSG), Housing Revenue Account (HRA) and Collection Fund was outlined in the report.  There were currently no significant issues of concern in relation to the HRA, however, the Collection Fund was forecasting an in-year deficit of £480k.  The DSG continued to be an area which was faced a financial challenge with a projected deficit increase in 2019/20.  Action was being taken with the aim of reducing the cumulative deficit and the DSG brought towards a balanced position. 

The report also outlined the most up-to-date capital spending positions for 2019/24 for approved schemes.  It was noted that the revised capital programme budget was £77.143m at the close of Quarter 1, a net decrease of £10.346m from the original budget of £84.332m.  Actual expenditure to 30 June 2019 was £6.297m (8.16% of the forecast outturn).  It was probable that the forecast position would continue to change before the year end with additional re-profiling into future years.

An overview of variances in four key services areas was outlined in the report which included wage related pressures, corporate landlord pressures, traded services and community care.  There were additional pressures highlighted related to the Dedicated Schools Grant (DSG).  Due to the severity of the deficit, a recovery plan had been submitted to the Department for Education.  It was unclear what the amounts in the settlement mean at a local level at this point.  Management actions and monitoring were in place.

Members commented on the deficit this early in the year.  Areas of concern could be reviewed by the Select Committee to address concerns with the relevant members and officers.  Education and Adult Services were highlighted.

Members commented that it needed to be recognised that half of the Council’s budget had been removed over recent years.  The local authority had to set the budget not based on what ought to be spent but based on the amount available to spend.  In many cases members and officers were being put into a difficult position to set a budget on the funding available and not what was needed. 

Members asked about the pressure from Brexit on adult social care providers.  Members were informed that Oldham had a lot of small local providers and contingencies were in place.  The settlement did contained funding for adult social care which included the Better Care Fund.  Monday had been ringfenced for 2020/21 and there was flexibility in the budget.  The authority had the added benefit with MioCare.  The continued and additional funding for the Joint Social Care Grant was available to both adults and children.

Members were also advised on the position of the capital grant.

RESOLVED that:

1.       The Revenue Budget Monitoring Report 2019/20 Quarter 1 – June 2019 and associated appendices be noted.

2.       The Capital Investment Programme Report 2019/20 Quarter 1 – June 2019 and associated appendices be noted.