Agenda item

The Cabinet considered the Resources Report.

The Cabinet Member with Responsibility for Finance (also the Leader of the Council) explained that now that they had four months of data for 2018/19 it was possible to make a projection of the outturn at the end of the year. A significant over-spend of £17.9 million was being reported. However £12.7 million of management action was also being reported which would allow the projected overspend to be reduced to £5.2million. The Leader felt that further action needed to be identified to achieve a balanced budget.

Around £15 million of the overspend was due to Adult Social Care, partly due to the social care reform programme going slower than expected and partly due to demand pressure. Adult Services had seen a greater demand and the cost of older people's care packages had increased as people were living longer with more complex and therefore more expensive, care needs. The situation was not unique to Worcestershire; Adult Social Care was seeing significant pressures around the Country. Children's Social Care costs had also increased.

The Leader believed that a national solution was required and he believed that cross-party work was required to tell Whitehall of the pressures. At the same time Management actions 'good housekeeping' would continue in order to help the in-year pressure while the shape and size of the authority would also need to be reviewed. Tough decisions were needed in order to make the financial situation sustainable. A further report would be brought back in November.

At the same time the Leader pointed out that there was some good news in the report with the purchase of land for the science park and improvements to town centres.

In the ensuing debate, the following principal points were raised:

·       A member from outside the Cabinet queried why Cabinet in February had said the budget was good news. She was aware that some officers had recommended that the council should take the maximum amount of Council Tax which would have raised £2.3 million – an action that her group had supported. She was worried at the lack of transparency and that other Councillors had been kept in the dark. As Vice-Chairman of the Adult Scrutiny Panel she had been asking to look at the budget but had been refused. However she did want to congratulate the Chief Financial Officer on the clarity of his report

·       A member from outside the Cabinet commented that the overwhelming issue was in Adult Services. He asked what was planned in order to get Central Government help. It was agreed that a fundamental change needed to come. He said other Councillors would support ways of lobbying Government but he was worried that the situation could get worse if it was not addressed. He asked whether there could be cross-party lobbying of Government. Whatever happened he hoped compulsory redundancies would be resisted

·       In response it was agreed that Adult Services was a large part of the risk due to being demand-led. Further modelling would take place which would identify the trajectory of demand. This would not solve the issue but would help with decision-making

·       This was a national problem. Increasing Council tax would only have been a short term help and would only solve a small amount of the problem. Council tax increases may have helped but it could not address what was a national funding gap

·       MPs had been briefed about the issue and work had started with the County Councils Network on a coherent approach. Shire Leaders were discussing how to work together better and raise the issue nationally but the administration were open to suggestions about how that could be further progressed. The Leader thought it a sensible approach if a joint letter could be agreed between all Groups to send to Government

·       The report was comprehensive and showed the administration was being open and transparent

·       Worcestershire was not in crisis and there was a measured plan in place. The 2017 Group budget proposal would not have met the funding gap. This was a national issue and it was not right to punish council tax payers. It was too early to say if there would be compulsory redundancies, but the Council needed to reshape. Tough decisions would need to be made while at the same time the most vulnerable in Worcestershire would continue to need protection

·       The Cabinet Member with Responsibility for Communities welcomed the capital investment in Malvern Science Park

·       The Leader pointed out that the information was now available to Scrutiny and it was important for Scrutiny Panels to meet to discuss the situation and examine areas of overspend. All members had a role in addressing the situation.

RESOLVED: that Cabinet

(a)            endorsed the Cabinet Member's conclusions concerning revenue budget monitoring up to 31 July 2018;

(b)            noted the current progress regarding savings plans approved by Council in February 2018;

(c)            noted the additional management savings measures outlined in Appendix 9 to address the forecast position;

(d)            noted that the Schools Forum was considering actions to recover the overspend positon on the Dedicated Schools Grant (DSG) High Needs Block and agreed to consider their responses in December, noting the financial position of the Council to Schools Forum;

(e)            approved the budget virement amendments to the Capital Programme from the Capital Contingency for land purchase and works at Malvern Hills Science Park of £2.1 million, noting financial contributions from the Worcestershire Local Enterprise Partnership and Malvern Hills District Council to this scheme;

(f)             recommended that Council approve the updated Capital Programme at Appendix 7, including the capitalisation of items under the additional saving proposals totalling £2.250 million, as set out at Appendix 9; and

(g)           noted the report on borrowing and lending transactions during 2017/18 detailed in paragraphs 75 to 76 and Appendix 8.