To consider a report by the Executive Director for Corporate Development.
Minutes:
The committee reviewed the Quarter 1 Finance Report, which
had been presented to the Cabinet on 28 July 2020.
The
Cabinet paper reported an overspend of just under £5m for 2019/20, which was
funded from reserves. The Audit &
Governance Committee would receive a fuller outturn report alongside the
statement of accounts for approval at its November meeting.
The
report also forecasted an overspend of £43m on Council budgets in 2020/21. The Dedicated Schools Grant (DSG) was not a
financial management responsibility for local tax-payers, as Regulations
clarified that this fell to the Department for Education. However, the Council was carrying the
cumulative overspend on DSG of £21.8m as a negative reserve in its balance
sheet. A further overspend of £18m was
predicted this year.
The
Executive Director for Corporate Development updated the estimation of the
overspend to £35m for this year. If the figure remained at £35m it would be
covered by reserves but next year would prove to be a real challenge.
Members
were advised that Income projections were well short of what had been
anticipated due to Covid. Expenditure had increased ie. PPE and care placements
had also increased. However, Covid was not the only problem there were some
underlying financial challenges.
Cllr
Mike Parkes welcomed the update but wanted to know if the £35m took into
account the loss from revenue and what plans were in place if additional funding
from central government was not forthcoming.
The Executive Director for Corporate Development advised that the £35m
was for this financial year. In reality
COVID will have cost about £6m but the council was able to take government
support for around £39m. In terms of
lost income this was about £35m for this financial year. However, the
government has supported some of that.
In
respect of reserves the Council was in a fortunate position that monies had
been set aside to fund the high needs block overspend around £13m. The next
financial year was a concern nationally as well as locally. In respect of car parking, whilst car parks
were closed during lockdown things were now starting to pick up. Council tax and business rates collections
were being monitored. Officers were looking to close the gap through tactical
savings and pushing hard on transformation programme.
Cllr
Clare Sutton expressed concern regarding the funding for Adult Services funding
as the majority appeared to be business as usual. She felt the pressure would get worse in this
area. The Executive Director for
Corporate Development advised that officers did factor in an increase for a
price and level of demand when setting the budget but clearly had not
anticipated Covid. For the next
financial year this has now been factored this in and modelling completed. The Acting Corporate for Commissioning
highlighted the new measures in place to try and mitigate this e.g. Home First
programme. Work was ongoing to transform services around the community rather
than around hospitals. They were now
seeing a trend of people not wating to go into care homes. Members were advised
that mitigations were now in place to recover and rebalance. Officers were looking into the costs and see
how they could be reduced.
Following
a question about the rising numbers of externally placed children in care, the
Corporate Director for Education and Learning advised that work had been
stalled a bit by COVID and the increased number of children in the care system
was adding to pressures. However, there were a number of projects coming
forward that would increase sufficiency.
In
respect of the dedicated schools grant, Cllr Sutton expressed concern that the
report mentioned that the debt sat with schools and they didn’t have the money
prior to Covid and was concerned they would not have it now. The Corporate
Director for Finance and Commercial advised that the overspend was nearer to
£22m and was continuing to overspend this year. The DfE had confirmed this was
not a local tax payer issue and continued to work the Local Authorities on a
recovery strategy. The Executive Director for People, Children advised there
was no expectation that individual schools would be asked to pick this up.
Following
a question from the Chairman regarding the general standard of the school
buildings in the county, the Executive Director People, Children advised there
was an ongoing maintenance programme but recognised there were challenges
around this. She suggested that the
committee might like to look at the sufficiency of places at a later date.
In
response to a question about the reduction in capital funding and whether it
was realistic, the Corporate Director for Finance and Commercial advised that
the £15m had not been reduced. There would be an update in the November Cabinet
report, although more of the £15m had been spent. Reference to this in the appendix to the
report was a request for approval of additional spending.
Cllr
Susan Cocking made reference to the additional buses for school children and
considered how much was being spent on this and how long did officers foresee
using additional transport. The Corporate Director for Education and Learning
advised that the additional money was being spent from the requirement to
social distance schoolchildren. The spend for this half term was 330/350k for
this half term which to date had been covered by government grants and officers
were waiting to hear about future funding in this area. In respect of any
additional pressure on bus services, numbers were broadly similar. However, some parents were taking their
children to school and this was largely balanced through putting the right
provision in place. Officers confirmed that there was no funding allocation for
schools in respect of PPE.
The
Vice Chairman expressed concern about the forecasting of budgets and that
despite putting significant amounts of funding in each year it never seems
enough. The Executive Director for
Corporate Development explained that there had been an additional degree of
volatility this year in respect of the care sector and additional requests for
homecare. Officers were currently in the
process of modelling for next year and drawing comparisons with neighbouring
authorities. He accepted this was an
area for improvement and work was ongoing to improve this.
Following a question from the Chairman regarding forecasting
and whether there had been any thoughts of a second wave in respect of income
etc, the Executive Director for Corporate Development advised that forecasting
was based on first 3 months of the year and officers had not necessarily built
in a second wave. There was a whole lot
of other variables and assumptions being considered.
The
Interim Corporate Director for Adult Care Operations advised that the only way
to manage demand was to put more investment into prevention. Covid had brought
the community together to respond and had enabled officers to work more on the
prevention side. There was a huge cultural change ongoing and this required a
lot of support. The aim was to slow down
the amount of people coming into adult social care. The Acting Corporate Director for
Commissioning added that one of the key issues as well as understanding the
data was the huge population of self funders in Dorset and the Council was now
working with a lot more people and organisations as a result of Covid. The Chairman felt it would be helpful to
have separation with a written overspend for Covid and one for business as
usual.
The
Executive Director for Corporate Development made reference to the financial
benefit as a result of Covid, in respect of office use and lack of travel
expenses. Thoughts were now ongoing as
to how to make this sustainable. Part of this stocktake will feature in the Qtr
2 Finance report for Cabinet in November. Transformation had not stopped, it
was just that the focus for the organisation could not be entirely on
transformation at the present time.
The
Executive Director People, Children paid credit to colleagues in Children’s
Services during the staffing changes.
She updated members on the work being done with headteachers, parents
and early years level and was confident there had been a good start with some
savings having already been delivered. She highlighted the very credible work
that had been done with partners during the Covid crisis and felt that the
transformation works had made a good first step.
Following
a question from a member regarding looked after children and how steps were
progressing to accompany unaccompanied asylum children, the Executive Director
People, Children advised this had been challenging in terms of some of the government
organisations not being available to do their ordinary work. Part of a
conversation nationally referred to a critical incident in Kent and that across
the country no Local Authority should have nor more than 0.07 of unaccompanied
children. There was a continued debate
about whether there should be a forced scheme in place. Dorset had so far
supported an additional five children and had been asked to support further,
but to date had not been in a position to do so.
One
member highlighted there were199 children at the end of June placed externally
out of the county and requested up to date numbers. The Executive Director People, Children
advised that for all foster carers there had been a lack of available placement
s and some residential provision had been unavailable. There were currently in
excess of 60 children within the family law court process which was partly due
to the closure of some courts. However,
the numbers of children in care had remained steady. Out of county placements
had reduced by a small number to aroudn195. The level of provision remained a
real challenge but there were significant pressures around the whole country.
Decision
That the Committee noted the outturn for 2019/20 and recognised the challenges regarding the forecast position for 2020/21.
Supporting documents: