Agenda item

Financial Results 2017-18

The Head of Financial Services introduced the report.

Councillor Muldoon stated that he was concerned that an addendum that had amended a paragraph on the original report was tabled at Mayor and Cabinet. This addendum had not been circulated to Business Panel Members. He requested that in future officers should circulate all tabled addendums at Mayor and Cabinet meetings to Business Panel Members.

Action >>>>>> Head of Business and Committee

Councillor Muldoon said he was concerned about the amount of overspend that had become apparent in the report, and asked why it was not detected earlier. He said that this did not inspire confidence in the reports that come before Members.

The Head of Financial Services said that since the beginning of the year there had been significant budget pressures. The projected overspend for the Children and Young People Directorate had been £7m. This then increased significantly to £15m in January. He stated there were a lot of budget assumptions which turned out not to be accurate, with the current database being adjusted by £2m. Also a £1m budget savings that was to be delivered did not materialise, and in addition there were £1m of costs relating to children placements.

Officers informed Business Panel that in January a forensic piece of work was done which uncovered the significant overspend, hence the addendum being tabled at Mayor and Cabinet. Panel Members were informed that the new Oracle Cloud that had been introduced would ensure the monitoring process was tightened, and officers would get a budget that was current. The Head of Financial Services said to address this going forward officers were proposing to re-run the first quarter figures and take a report to Mayor and Cabinet in the Autumn.

The Executive Director for Resources and Regeneration informed Panel Members that there had been overspend in CYP Directorates nationwide, and this was unprecedented. She said officers have to tighten the systems, she added that the delivery of savings and some system issues had contributed to the overspend. The Executive Director for Resources and Regeneration said she would agree that if officers had been aware of the state of the budget earlier they would have been able to address it.

The Executive Director for Resources and Regeneration said going forward officers would tighten the process, with constant monitoring, and would ensure they have accurate figures to work with.

Councillor Mallory said that a lot of work was needed to address this, and the joint CYP and PASC would look into this further in September. He added that Members would need to know what the CYP Directorate would be doing to address this. He also questioned the accuracy of the systems being used, and whether officers were in control of actions that were being taken that would adversely affect the budget.

The Executive Director for Resources and Regeneration said that issues that led to the overspend were from Children Social Care, HR Systems and Finance Systems. She added that officers had reviewed Children Social Care Placement provision, and the decision had been made to increase the budget to match the service to give the Directorate enough resources to manage its services.

Councillor Wise agreed the budget overspend was unprecedented, and said Members were concerned that although they were told in September the overspend was £7m, this changed to £8m in January, only to be told at a later date that it had shot up to £15m. Councillor Wise said there were some things officers had control over namely, fostering, and the use of agency staff. She questioned the rationale for using an increasing number of agency staff after the Council had agreed that they would only be used in extreme circumstance.

The Executive Director for Resources and Regeneration said processes had been put in place to reduce the number of agency staff the Council appoints, but some flexibility occurred because of Children needs. She said going forward this would be tightened again, and challenged. Councillor Wise said she understood needs had to be met but believed this was a case of someone taking their eyes off the ball.

Following further discussion, the Executive Director for Resources and Regeneration stated that she recognised there had been some systems failure, hence officers were looking at tightening the process to ensure accuracy going forward. She said she was aware that proper management and monitoring had to take place.

The Chair said the Public Accounts Select Committee, and the Children and Young People Select Committee have to continue looking into this error. The Chair said Members have to believe the information they had been given. He said if Members could not have trust in the figures they get then it would be difficult for them to make the right decision. The Chair said to manage the budget Members have to know and understand the figures. He said the Children and Young People Select Committee and the Public Accounts Select Committee would be looking into the overspend in great detail.

The Chair for Public Accounts Select Committee, Councillor Mallory said for them to do their job well they would need details of what had been done to address service provision, and what the new arrangements would be. He said it would be beneficial to get the result of the joint scrutiny before the update to Mayor and Cabinet.

Action >>>>>> ED CYP, ED Res & Regen.

RESOLVED that the report be noted.