To discuss with the Executive Member for Transformation & Finance and the Director: Finance the current financial position in preparation for scrutiny of the 2019/20 budget proposals.
Stuart McKellar, Director: Finance updated the meeting on the Council’s financial position since the Council set its budget in February 2018. He reminded Members that in order to bridge the 2018/19 budget gap 1% had been added to Council Tax and an additional £0.5m was taken from the General Reserves.
The latest reported position was that there had been significant increases in demand for social care services with a potential overspend of £0.5m in Adult Social care and £1.5m in Children’s Social Care. He advised that other potential variances would broadly balance. There was an expected underspend on Treasury Management due to additional income from capital receipts, Section 106 and Community Infrastructure Levy moneys. The Council would also benefit from a successful £2m VAT claim for leisure sites, that would provide additional one-off funds to support future budgets. The corporate contingency of £2.5m remained and Corporate Management Team (CMT) would keep spend under close review for the rest of the year.
The Director: Finance explained that the new Fair Funding review reset would recalibrate the distribution of funding across local authorities. There was therefore a risk that this would have a significant impact although it was anticipated that some dampening mechanism would be used to reduce the impact in the short term.
He explained the assumptions which had been made in order to start the budget planning process.
He reminded Members that the successful bid to establish a Business Rates Pool across all Berkshire Authorities as a pilot would both inform the new system in 2020/21 and had been financially beneficial for Berkshire as a whole and Bracknell Forest specifically.
He explained that CMT were in the process of re-assessing the assumptions used to calculate the predicted gap and that the gap in 2020/21 was large due to the impact of the new funding arrangements coupled with no significant transformation savings currently projected beyond 2019/20. The financial strategy was to use the Future Funding Reserve to manage the transition to the new funding system over time.
The Director: Finance advised the meeting that the original target of £11m of on-going savings had been achieved by the transformation programme. He reiterated that both Children’s and Adult Social Care were experiencing significant increases in demand which were impacting on the delivery of transformation projects. It was noted that CMT were considering how to balance a whole systems approach with targeted interventions.
In response to questions from Members the following points were made:
The Director: Finance explained that until the Executive approved the draft budget proposals it would be difficult to provide a further update. The Chairman of the Commission stated that the Commission should be able to comment on the draft budget before it went to the Executive.