Agenda item

The Service Lead, Finance introduced a report that provided an update on the financial position of the Council’s Revenue Account at Quarter 3 of the 2019-20 financial year.

Members were informed that at Quarter 3, the forecast year end position for all Council services was £107.727 million, resulting in an overspend of £1.102 million.  In comparison to Quarter 2, the overspend had increased by £0.909 million. 

Taking the Slough Children’s Services Trust forecast financial position into account, the Council’s exposure to financial risk was an estimated net expenditure forecast for the year of £108.879 million.  This represented a potential budget overspend of £2.254 million, which was 2.11% above the approved budget.

Members were provided with a summary of the key points detailed in the report:

·  Slough Children’s Services Trust (SCST) - due to the significant work undertaken by Slough Borough Council (SBC) officers and Department for Education (DfE) officials, the risk of SCST insolvency during 2019/20 had now been averted.  SBC officers had worked closely with the SCST leadership team to understand the SCST’s current financial position and support the organisation with initiatives to reduce the overspend.  Both SBC and SCST officers had been in regular discussions with the DfE and Local Government Association to highlight the ongoing financial pressures facing the Trust and children’s services generally. 

·  The Housing Revenue Account was budgeted to spend £37.550 million in the current financial year; this gave a planned net deficit of £2.871 million.  The deficit would be made up by a planned contribution from the housing reserves.  Currently, income and expenditure were expected to have a neutral balance for the year.

·  Write-offs totalling £202,776.12 had arisen over the past three months.  It was explained that every effort was made to recover money owed and write-offs were requested as a last resort, either when the debtor was untraceable or had absconded.

·  The Council currently had £8.200 million of general reserves and £4.200 million of earmarked reserves available to protect the Council from unforeseen financial pressures.

The Chair invited Members to comment and ask questions.

During the course of the discussion, the following points were raised:

·  It was highlighted the SCST had faced the real possibility of becoming insolvent.  A Member asked how assured officers were that this situation would not occur again in the future.  It was explained that regular discussions were being held between the Council and SCST and officers were vigilantly aware of the issues that could arise.  SCST was a demand led service, and work had been undertaken to implement initiatives to generate savings. 

·  Referring to section 5.15 of the report ‘It is absolutely in the Council’s best interests to ensure the SCST’s finances are in a robust position at contract end’.  A Member asked when the contract was scheduled to end.  It was reported that the contract was due to end in 2021/22 and it was in the Council’s best interests, to ensure SCST was in a financially robust position, in case it was deemed, at contract end that any existing liabilities owed by SCST should fall to the Council rather than the DfE.  SBC officers had entered into discussions with DfE officials to obtain clarification on this matter.

·  A Member asked what financial impact it was anticipated the Covid-19 virus would have on the Adult Social Care budget.  It was explained that officers had been holding daily meetings to discuss and review the implications the Covid-19. 

·  In response to a query regarding staff of SCST, the Committee was advised that when the Trust was established the existing operational staff had been TUPE (Transfer of Undertakings Protection of Employment) transferred over to the Trust.  The Trust operated a strategic board, and one councillor had been appointed to sit as a board member.

·  A Member asked who scrutinised SCST.  It was explained that SCST was held to account by the DfE and external auditors.  In addition, the Council’s scrutiny panels could request reports and officer attendance at meetings.  The Education and Children’s Services Scrutiny Panel was due to consider the SCST Annual Report at the meeting scheduled to be held on 15th April 2020.

·  The Council was currently on target to achieve 79% of the savings agreed as part of the 2019/20 revenue budget.  It was explained that planned savings targets had slipped mainly due to a delay in the third and fourth tier management restructure not being completed.

The Chair thanked the Service Lead, Finance for the report.

Resolved – That the Committee noted:

(a)  The reported underlying financial position of the Council, including the Slough Children’s Services Trust, as at the third quarter of the year.

(b)  The management actions being undertaken by officers to reduce the budget pressures.

(c)  The potential impact on the Council’s general reserves and associated implications for the Council based on the latest financial projections.

(d)  The virements and write-offs, as detailed in section 9 and 10 of the report.