Decision details

The Leader presented the report which detailed the current forecast position on the Council’s revenue budget and the risks and opportunities that presented themselves within the September position.  The Leader met with Leader of the Local Government Authority for England along with Scottish and Irish Leaders in London the day before.  Each Local Government Leader faced the same issues even in different party political groups, which was a lack of finance and huge demand for service resulting in the demand outstripping supply.

The report pointed to a challenging position that the council was currently managing.  There was significant and unprecedented demand in social care and special education services, this was an issue across all Council’s in Wales and the UK.   The position however was currently being managed within the overall budget and some actions had been previously agreed to bring this about, such as the non-essential spending restrictions.  Focussing on the positive there was only three out of 156 areas where there were any issues.

It was noted that the position had improved since last report and whilst there were inherent risks in these forecasts; not least in these ‘demand-led’ areas, there were also opportunities for the position to improve even further towards the second half of the financial year.  With this in mind, Cabinet would be keeping a close eye as time progressed.

Whilst there was no guarantee as to the demands in the future, everyone was expected to exercise stringent financial management.  The Leader on behalf of the Cabinet thanked senior managers and their teams for their hard work.

Finally, as the report highlighted that the key focus was to stabilise and manage the demands and lower the future cost pressures on social care and education budgets.  This would take some time and it was therefore paramount to manage the risks in these service areas.  The Leader felt confident that the challenges could be met, whilst continuing to address the needs of Newport’s most vulnerable residents.

The following observations were made:

§  Whilst there were three areas that faced challenges, the majority of areas by comparison had done extremely well to show a projected underspend.

§  Social Services were looking into ways on how to maintain a quality service and reduce costs.

§  It was important to emphasise that the Council was projecting an underspend, however it was during these times of financial hardship that reserves were used to ease the pressure.

Decision:

§  To note the overall budget forecast position and key budget challenges.

§  To note the use of the Council’s contingency budget to balance the current level of overspending, previously approved by Cabinet, which would be assessed each month on an on-going basis.

§  To note that a targeted non-essential spending restriction was already in place as reported previously and re-affirm the need for robust financial management and maximise savings on the non-essential spend restriction, wherever possible.

§  To note the level of undelivered savings within each directorate and the risks associated with this.

§  To note the forecast movements in reserves (appendix 3) and approve the additional Invest to Save reserve bids summarised in appendix 4.

§  To note the balance in respect of the investment reserve (use of 16/17 underspend on a series of one-off projects/priorities) which had been assumed within the current forecast.