The Strategic Director of Finance, Governance and Support submitted a report, the purpose of which was to advise the Overview and Scrutiny Board of expenditure against the Councils revenue and capital budgets, and its performance overall at Quarter Three 2016/17, and provide a position statement in respect of Treasury Management and General Reserves.
Paul Stephens, the Head of Performance and Partnerships and Ian Wright, the Head of Financial Planning and Support were in attendance at the meeting to present the report.
The Board was advised that the consolidated quarterly report, covered the Councils revenue position, Capital Programme position, reserve position, and Treasury Management. It was felt that this amalgamated report provided an integrated and comprehensive overview of performance within the Council and provided assurance that mitigating actions were in place to address underperformance.
The report stated that the overall revenue position at Quarter Three 2016/17 was a forecast budget saving of £0.019m (or 0.02%). The overall capital position at Quarter Three 2016/17 was a forecast underspend of £1.9m (or 5.4%). The Council's borrowing as at 31 December 2016 was £127.4m, and the reserves were forecasted to be £27.975m as at 31 March 2017.
Details of the performance of Outcome Areas at Quarter Three 2016/17 was included within the Balanced Scorecards at Appendix 1, and the consolidated action plan in response to all of the issues identified within the report was attached at Appendix 2 to the report.
In terms of Adult Social Care there was a forecast budget underspend of £0.112m. Early delivery of the 2017/18 budget savings had identified a saving of £1.241m. It was proposed that these savings would be transferred into the Change Fund in order to support future service transformation.
In respect of Finance, Governance and Support, there was a forecast budget underspend of £0.497m. The projected savings were due to an increased level of recovery of Housing Benefit overpayments (£205,000) and increased income from Council Tax court cost recoveries (£324,000). The £531,000 had been included in the Medium Term Financial Plan (MTFP). There was also a projected saving of £290,000 in the Community Support budget and it was proposed that this saving be transferred into a new Hardship Fund for Council Tax.
In terms of the summary of expenditure at Quarter Three, this was an improvement compared to the position at the end of Quarter Two (29.4% underspend), as a result of significant work undertaken to improve and embed the Council's Programme and Project Management Framework and associated capital monitoring processes. In recognition of the increased level of risk and unpredictability in some capital projects, while maintaining the required rigour in respect of project management, going forward the target for capital expenditure within Balanced Scorecards had been amended from 100% to 95%.
In terms of the Loan Portfolio Trend, since 2011, cash balances had been allowed to run down to fund the capital fund programme, without additional borrowings, which had resulted in the drawdown of short-term loans.
In respect of Learning and Skills, performance had reduced at Quarter Three, with a number of measures off target. Improvement within educational attainment and the local skills profile were central to the achievement of the 2025 Vision for Middlesbrough. The Council had set aside £2m to invest in school improvement services between 2017/18 and 2019/20 and the plan to achieve best value from this investment would be developed in Quarter Four.
In terms of Safeguarding and Children's Care, there was a projected total pressure of £229,000 on the Adoption Service. £150,000 of this pressure was as a result of one-off adoption fee payments to an agency for five children that were planned to be adopted by the end of 2016/17. These children were currently within the in-house fostering system, and this would produce savings in future years. The remaining £79,000 pressure had resulted from an income shortfall on the sale of adoption places.
The Chair of Overview and Scrutiny Board advised that when children were adopted by people outside the area, the Council paid the agency fees and if a child from outside the Middlesbrough area was adopted within Middlesbrough, the Council received a fee.
A member queried whether the Council should be concerned about the financial situation. Members were advised that the Council had contingency growth of £1.5m each year built into the budget. It was highlighted that the Council had savings targets of £4.9m in 2018/19. The Interim Director of Children's Services and the Director of Education were currently working on a transformation plan as part of the Change Programme Phase 3.
A member queried whether any pressures were being placed on people looking after children and it was confirmed that this was not the case.
A member queried whether if the balances showed an underspend this meant that services were not being delivered. A member commented that an underspend was not necessarily a positive thing as the Council had allowed for that provision and members needed to ask why that service was not being provided. The member queried at what point officers would bring any concerns to the attention of members.
The Board was advised that the underspend in respect of Social care was partly due to the fact that people were being re-abled so on-going social care services were not required. In terms of community support, people were not applying for the support as it was not required. If there was an issue that was impacting on the Council's performance, officers would highlight the issue.
The Chair of Overview and Scrutiny Board advised that if members had any concerns about performance, they could invite the appropriate service managers to the Overview and Scrutiny Board to request further information.
The Board was advised that the £350,000 projected savings in respect of Public Health would be transferred to the Public Health reserve at year-end.
A member queried whether there was any procedures in place that would trigger an alert in terms of the provision of services. The Board was advised that quarterly reviews were held and a series of clinics were held with officers and Directors and any concerns would be highlighted at those meetings. The member requested that officers consider members concerns and report back to a future meeting on the mechanism for triggering alerts.
Members were referred to a table included at Paragraph 76 of the report in respect of Performance and Risk. The Board was advised that the current position in respect of performance for the majority of service areas was 75% and above.
The Board was advised that the aim of the Council was to ensure that its ambitions were in line with the Mayor's Vision.
It was commented that the revised format of the report was much easier to understand.
ORDERED as follows:
That Overview and Scrutiny Board:
1. That the overall revenue position at Quarter Three 2016/17, namely a forecast budget saving of £0.019m (or 0.02%) be noted.
2. That the overall capital position at Quarter Three 2016/17, namely a forecast underspend of £1.9m (or 5.4%).
100. Notes the Councils borrowing at 31 December 2016 of £127.4m, and its forecast Reserves at 31st March 2017 of £27.975m be noted.
3. That the performance of Outcome Areas at Quarter Three 2016/17, as reflected within Balanced Scorecards at Appendix 1, and the consolidated action plan responding to all issues identified in the report, at Appendix 2 be noted.
4. That officers consider developing a mechanism for triggering concerns about performance issue.