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Council plan overview report on budget position

Revenue budget monitoring

The monthly monitoring returns are set out in detail in each directorate’s Quarterly Service Report.

Across the council, variances have been identified that indicate a net over spend of £3.0 million, with £2.5 million remaining unallocated in the corporate contingency. The net position is therefore a potential overspend of £0.5 million which is unusual for this time of the year and of concern.

The major variances being reported are as follows:

Central

Additional income from Surrey Heath Borough Council for Suitable Alternative Natural Greenspaces (SANGS) capacity at Shepherds Meadow (-£0.2 million).

An under spend on concessionary fares due to trip rates being less than forecast (-£0.1 million).

Delivery

Within ICT under spends are forecast on computer software maintenance within departmental ICT, equipment within communications, and licences, equipment and consultants’ fees within Technical Services (-£0.2 million).

Due to a dip in demand and the increased income target set as a result of the completion of the second chapel, there is an income pressure at the cemetery and crematorium (£0.1 million).

A pressure on the car parking budget resulting from income targets being missed and maintenance costs at The Avenue car park (£0.1 million).

People

A £3.3 million over spend is forecast within Children's Social Care. The Devolved Staffing Budget is forecast to over spend by £0.4 million, mainly relating to unavoidable agency staff covering unfilled posts. Placement costs are forecast to over spend by £2.4 million. There has been a small increase in the overall number of placements, however the average cost of placements is much higher since the number of residential placements has risen. The increase in demand is also having an impact on the number of Special Guardianship Orders, resulting in a budget pressure of £0.2 million, and the Joint Arrangement for Childcare Lawyers (£0.1 million).

An overspend of £1.3 million is forecast on Adult Social Care which primarily relates to purchased social care for People with Learning Disabilities. The overspend is exacerbated by the full year effect of care package changes towards the end of last year combined with a reduction in the budget in respect of transformation.

Within Mental Health and Out of Hours there is a forecast overspend on purchased social care (£0.8 million) due to the full year effect of care package increases and a reduction in overall budget from transformation savings. There is also an over spend on staffing costs due primarily to a reliance on agency workers to fill vacant posts and to a lesser degree to retention payments to Approved Mental Health Professionals (£0.3 million), aimed at reducing the need for expensive agency workers.

Non-departmental budgets

While the level of the council’s approved capital programme has been unprecedented in recent years, income received from CIL has also been significantly higher than expected and the council has benefited from the business rates pilot. Consequently, the council’s external borrowing has increased at a much slower rate than was predicted when the current and previous years’ budgets were approved and Minimum Revenue Provision (MRP) costs are also lower. There is a projected underspend of -£1.8 million on interest and -£0.6 million on MRP.

Reflecting the full year impact of commercial property purchases has resulted in an under spend against corporate wide budgets (-£0.3 million).

An ongoing review of CHC funding means that further losses of income remains a significant risk, however transitional arrangements have been agreed with the Clinical Commissioning Group which are expected to mitigate the 2019/20 impact of any loss in funding.

This year is very unusual in that pressures are continuing to increase month on month for social care services, and this shows no sign of abating. These demand pressures will continue to be monitored closely.

Steps are being taken to reduce controllable expenditure in all parts of the organisation to make sure that net expenditure is contained within the approved budget by the year end.