The General Fund revenue outturn for 2017/18 is £290.674m, which is an overspend of £13.479m (4.9%) compared with the revised budget of £277.195m (see table 1 below). This outturn is stated before the net drawdown from specific and general earmarked reserves totalling £5.594m. Including net drawdowns from reserves, the outturn is £285.080m, which is an adverse variance of £7.885m (2.8%).
The cause of this is also detailed in the paperwork
1.2.4 The main reasons for the overspend are set out below.So how will the council deal with this? There are some clues in the papers.
1.2.5 The revenue budget for Adults and Communities overspent by £2.924m, whichhas been reduced to £1.207m following the drawdown from reserves. The overspend is predominantly driven by an overspend of £3m in the care placements budgets.
1.2.6 Adult Social Care (ASC) has experienced increasing complexity and demand for services since 2014/15. The learning disability budgets have been experiencing 15 pressure as a result of the transforming care (Winterbourne) agenda. The outturn includes c£0.275m spend on three supported living placements where responsibility for individuals has been transferred from the NHS to local authorities but funding to cover all of the cost has not. The average weekly cost for LD Supported Living increased by 18% from 2016/17.
1.2.7 The overspend also includes expenditure relating to backdated claims for Ordinary Residence that have been lost. This results in a one-off impact on the 2017/18 outturn of £0.479m and an ongoing budget pressure of £0.116m.
1.2.8 In terms of ongoing commitments, there is also significant pressure resulting from homecare, equipment and nursing care placements. The council has been working hard to support local NHS partners to cope with the pressures on the health system and reduce delayed discharges of care. The growing demand from health led to an increase of 7% in commissioned homecare hours (£0.933m) compared with 2016/17. The increase in homecare activity was also compounded by an 8% average in crease in contractual rates (£1.066m) as a result of inflation and changes in market conditions. This increase followed a period of suppressed inflationary increases and contributes to stabilising the care market. The weekly cost of nursing
care in Older Adults increased by 6% in 2017/18, with new clients costing £144 per week above the council’s minimum sustainable price given market pressures and additional complexity of need. 1.2.9 Non-placements budgets underspent by £1.3m, which offsets some of the pressures on the placements budgets. The underspends in this area are from inyear vacancies, one-off savings and additional income identified.
1.2.10 Community equipment costs have increased by £1m predominantly on items funded by the CCG. Equipment costs capitalised via the Disabled Facilities Grant (DFG) budget (£0.483m) resulted in a £0.3m underspend. The Deprivation of Liberty Safeguards (DOLS) service continues to be a significant cost pressure (£0.145m) in 2017/18 as a result of Supreme Court judgements in 2014/15 and a loss of grant funding since 2015/16. 1.2.11 Assurance was overspent in 2017/18 by £0.638m (10.5%). This relates to instructions to HB Law activity and disbursements being greater than the budgeted
1.2.12 The underspend for Central Expenses in 2017/18 was £2.968m, which represents 7.2% of the budget. The underspend is mainly due to the cost of financing the borrowing related to the Capital Programme (£3.700m). This is due to slippage on the anticipated profiling of capital expenditure and, as such, is not expected to be a recurrent underspend. This is offset by a one off overspend on Insurance of £0.702m which has been caused by a requirement to increase the value of the insurance provision following the annual external review..
1.2.13 The underspend for the Commissioning Group was £1.139m after contributing a net £0.675m to reserves. There were three significant variances in this area. Firstly, the Public Health budget delivered an underspend of £1.754m which, in line with the ringfenced grant arrangements, has been transferred to the Public Health reserve. The second major variance relates to the Resources section. Housing Benefit overpayment recovery over achieved by £1.7m. This variance can be very 16 volatile and relies on a number of external factors therefore has been transferred to the Housing Benefit Reserve to offset likely future deficits. The other major variance within the Commissioning Group is an underspend on the North London Waste
Authority (NLWA) levy of £0.876m. There are a series of variances below £0.250m relating to staff costs in a number of areas, including one-off redundancy costs, and the income budget for the registrar service not being achieved.
1.2.14 The overspend for CSG and Council Managed Budgets before drawdowns from reserves was £5.452m which represents 25.0% of the total Delivery Unit budget (£21.833m). After reserve drawdowns, this variance was £2.817m which represents 12.9% of the total Delivery Unit budget.
188.8.131.52 The Estates Managed Budgets have had significant challenges to manage during the year which has resulted in an overall overspend of £2.550m. Additional costs of £0.379m have been incurred as a result of additional security requirements and management of operational, void and/or vulnerable sites. The relocation of Street Scene and Greenspaces services that were historically accommodated at the Mill Hill Depot has also created an adverse budget variance of £0.757m which now needs to be included within the MTFS. The outturn includes an overspend of £0.680m due to the unbudgeted costs of leasing Building 4 at NLBP following an inability to relocate the services contained within when the original lease expired. The
Estates service’s responsibilities include the management of building compliance of the entire council maintained asset portfolio and the cost of
managing and maintaining void buildings. The budget level has remained
unchanged whilst the portfolio of buildings managed by the service has
increased from 5 to approximately 95. Operationally, this provides much
more assurance that statutory building compliance is being managed
appropriately, however has resulted in an overspend of £0.390m. Other
miscellaneous variances total an underspend of £0.053m.
184.108.40.206 There was an overspend in 2017/18 on the CSG management fee of
£0.037m, mainly due to approved change requests. Procurement and
Collection Fund gainshare payments totalled £2.428m. Procurement
savings generate benefit across the Council, however the gainshare
payments are paid for centrally. This was offset by a rebate from
Comensura and administration charges to other services, totalling £2.178m.
The net overspend was £0.250m.
220.127.116.11 Income levels were below the budget due to a shortfall in schools traded income of £0.704m and in print / photocopying recharges of £0.432m. The corporate programmes budget is based on historical levels of recharge and does not reflect the current service delivery arrangement leading to an
overspend of £0.467m. These income targets have been identified as
structurally unachievable and will be reviewed as part of the MTFS
programme during 2018/19.
1.2.15 The final revenue outturn for Education and Skills was broadly in line with budget.
1.2.16 The overspend of £2.438m for Family Services represents 4.2% of the total Delivery Unit budget (£58.504m). This represents an increase of £2.161m from Quarter 3 relating to expenditure on placements and employee costs. There was a 17 £2.300m overspend relating to external high cost specialist placements and associated services and the additional directed requirement for two assistant heads of service, three duty assessment team managers and eight duty assessment team social workers resulted in a £0.400m pressure. The ongoing improvement programme will continue to place pressure on existing resources. These pressures were offset by additional one-off grant funding (£0.416m) and realignment of the additional budget allocated by Policy and Resources Committee in June 2017 to high cost placements (£1.200m).
1.2.17 The overspend of £0.888m for Housing Needs and Resources represents 12.9% of the total Delivery Unit budget (£6.859m). The overspend reflects the ongoing cost pressures associated with the rising cost of temporary accommodation in the borough set against restrictions on rents that can be charged and remain eligible for housing benefit. Actions have been taken to mitigate this pressure, including purchasing homes on the open market as a cheaper alternative to existing temporary accommodation options, an increase in homelessness preventions and a focus on reducing the use of temporary accommodation. This overspend is after a permanent allocation from contingency of £1.300m.
1.2.18 The overspend of £3.954m for Re represents 1,231.8% of the total delivery Unit budget (£0.321m). This figure is after reserve drawdowns of £2.746m. The overspend primarily relates to two one off items that were resolved late in the financial year. The first key variance related to £4.5m included within the calculation of guaranteed income in the General Fund which, following legal advice, is instead accounted for within the HRA. The second one off item is contractual amount of £2.647m liable to Re upon the award of Planning Permission for Tranche 1 Phase 1 of the development pipeline or the 30th April 2018, whichever is the sooner. As the liability relates to periods prior to 2017/18, although this has been recognised in 2017/18 it has been funded from earmarked reserves. An agreement with Re to defer an element of both the management fee and guaranteed income provided an in year £1m favourable variance reducing the overspend.
1.2.19 The overspend of £0.100m for the Street Scene service represents 0.7% of the total Delivery Unit budget (£13.794m). The service has a number of variances both favourable and adverse which broadly equal out to leave a residual £0.100m overspend.
1.2.20 The outturn (after reserve movements) has increased by £5.951m since the forecast reported at quarter 3. The main movements are in shown in Table 2 below.
"The council will seek to further reduce this pressure by ensuring that all possible external funding sources are maximised. It is anticipated that an additional £1.5m income can be achieved by reviewing its recharges and the identification of additional income within the Environment group of services."
"Chief Officers are working to mitigate this pressure. Actions being put in place to manage the position include a vacancy freeze, control and review of all agency placements within the organisation, a review of all budget areas for non-essential expenditure and the introduction of recovery plans across all overspending services. "
"Whilst the in-year position being mitigated displays an overspend of £9.5m, this is after the planned use of £4.04m of reserves meaning an in year detriment to general fund reserves and balances of £13.54m (2017/18 £21.148m). "
So what does this mean? Well "all possible external funding sources" means you and me - The Council Tax Payer. Whether we own a business and require licenses, own a car and pay for parking or have any other reason to transact with the council, they want to maximise how much they charge us. They then say they are going to review staffing arrangements and all non essential expenditure. Just bear in mind that the Tories have been running the council since 2002. It would be reasonable to expect that in the last 16 years, if they'd been doing the job properly, this would have been reviewed a fair few times. They are either saying "we haven't been doing our job properly previously" or they are saying "over the past four council elections, we've mislead the people of Barnet about how seriously we take saving money".
And then there is the final one. They will be raiding the reserves. Do you remember this tweet from the Barnet Tories before the election?
RT ChippingTories "Wait till they hear Labour want to pay for it out of Council reserves.. Anyone can promise freebies, but can Barnet Labour pay for it? Nope.— Barnet Conservatives (@BarnetTories) April 26, 2018
Crime has soared under SadiqKhan after falling under BorisJohnson. The Mayor is failing us. https://t.co/2XNXwCxXf5"
The Barnet Tories are doing exactly what they berated Labour for. It really is a shame that there is no mechanism for sacking politicians when they are elected having mislead the public so badly.
I have three questions for the Committee that I have submitted.
1. The papers for this committee meeting demonstrate that the council can only maintain its budget by raiding council reserves. Does the chair of the committee agree that such a large scale raid on the council reserves simply to keep "Business As Usual" functions running is unsustainable?
2. The reports state that "chief officers are working to mitigate these pressures". At what point did they identify the crisis and start working to mitigate the pressures?
3. The report states that the crisis will be resolved "by ensuring that all possible external funding sources are maximised" - Given that Council tax is the major source of external funding for the council and that the papers say this will be maximised, does this mean that over the next two financial years, the taxpayer will be charged the maximim possible increase? IF not please state exactly what these sources are and what is meant by "maximised".