Agenda item

To consider the Finance Report Quarter 2 2019/20 as presented to Cabinet on 5 November 2019.

The committee reviewed the Quarter 2 Finance Report, which had been presented to Cabinet on 5 November 2019.

As requested by the committee, the Executive Director of People - Children and Portfolio Holder for Children, Education and Early Help attended the meeting to answer questions in respect of the Budget for Children’s Services:

·                Where possible, children would be placed with an appropriate guardian including with other family members

·                There was a cost pressure associated with securing accommodation and an issue with capacity.  Cabinet had recently agreed to re-establish a children’s hub and suitable properties were being looked for

·                Demand in this area was high and liaison was being undertaken with the Government as to how they were able to influence national issues in this area

·                Areas for focus included the development of a residential hub, training and support for foster parents, preventative work and providing the best service possible where provision was out of county.  Work had started but would take time

·                The Executive Director confirmed that there had been involvement and support from portfolio holders, Cabinet and Council for work in this area

·                In terms of forecasting for future budgets, there would always be an element of being led by demand, however there was recognition that more control could be achieved if the right level of edge of care services were in place

·                Part of the Blueprint for Change consultation was about locality area partnership working and working more closely with the community in order to safeguard children

·                The Executive Director of Corporate Development noted that part of building the budget for the following year was about trying to anticipate the level of demand on the service.  There was a model but it was recognised that some factors could not be anticipated and this needed to be built into the budget

·                Reference was made to the disposal of children’s homes by the former Dorset County Council and the background to this was discussed.  The Executive Director of People, Children, noted that the provision currently being considered by the council was different to what had been in place before.  Areas currently being explored included the provision of supported lodgings for 16 to 18 year olds and in particular, a model including partner involvement and contributions and potential income

·                In response to a question, the Executive Director of Corporate Development noted that a number of factors were taken into account when setting the budget and this included using market intelligence to understand likely inflationary pressures

·                Consideration was given to the number of looked after children in the council area and the budget forecast for the next financial quarter

·                The impact of the recent tranche 2 restructure on finance team support for Children’s Services was raised and it was noted that moving forward, the model was to have a central corporate finance team in place with business partners allocated to each service area.  The level of resource and expertise required for Children’s Services was recognised and would be in place moving forward

·                The Chairman commented that although the council should always aim for good value for its services, it was key that the budget fitted the service in this area.  There were a lot of pressures in this area and he felt that demand would always outstrip savings that could be made.  He felt that the council needed to decide that the service was a priority and budget accordingly and he encouraged the Leader and the Finance Team to provide appropriate funding in order to support looked after children

·                A point was noted with regard to reference in the report to Education, Health and Care Plans (EHCP) and the need for further narrative in the report around this area

·                The availability and use of reserves was referred to and the opportunities local government reorganisation and subsequent transformation programmes had provided

·                Further information on convergence savings would be provided in future reports.

The Chairman thanked the Executive Director of People, Children and Portfolio Holder for Children, Education and Early Help for their attendance and the information they had provided.

The committee considered the issues arising from the rest of the report and during discussion the following points were raised:

·                The local government finance settlement would not be know until January 2020 and therefore there would be assumptions in the council’s budget.  A Budget Scrutiny Councillor Event was to be held on 13 January 2020, to which all councillors had been invited, and further explanation of the budget and assumptions made would be provided.  There would also be consideration of the budget at Cabinet in January and Full Council in February.  The Council was required to set a balanced budget before the start of the next financial year although it was recognised that adjustments could be made during the year through the quarterly finance reports to Cabinet

·                Reserves had been brought together from the six former councils and reviewed, and part of this was to enable £5m of funding to be released from reserves to be established as a transformation fund.  Bids would be considered by a group of councillors meeting as the Transformation Board.  In response to a question, it was noted that a small number of bids had been considered to date.  The fund provided an opportunity to transform the way things were done by the council.  The committee would receive further information on work in this area through a future internal audit report and information to be included on the council’s risk register

·                In response to a question, it was reported that consideration of income generation was being undertaken through the budget process

·                Application for government grant funding was also considered where appropriate.

Decision

1.    That the Audit and Governance Committee note with concern, the predicted overspend at the end of the second quarter and the change since quarter 1;

2.    That the Audit and Governance Committee request that the Executive Director of People, Children’s, Executive Director of People, Adults, and relevant portfolio holders attend the meeting of the Audit and Governance Committee on 24 March 2020, when the next finance report is considered, in order to hold a discussion on issues in these areas.