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Agenda item

Budget Monitoring Financial Forecasts 2014-15

Minutes:

The Head of Financial Services introduced the report, and informed members the report had already been to the Public Accounts Select Committee and Mayor and Cabinet. He said that the Treasury mid-year review had been added as an appendix to the report for completion. The Head of Financial Services highlighted that the Council was projecting an overspend of £10.6m which was a significant amount. Panel members were told that the biggest spending was on Children Social Care and Adult Social Care. Panel Members were also told there was an on-going restructuring of the organisation which would have a significant impact on services.

 

The Head of Financial Services said a Corporate Expenditure Panel (CEP), had been established, which included the Chief Executive and the Executive Director for Resources and Regeneration. This was in place to act as another layer of scrutiny for proposed spending throughout the council. This was to ensure that budget holders were aware of the Council’s position, and were doing their best to reduce spending.

 

Councillor Slater asked whether the Council could lobby central government for additional funding. The Head of Financial Services said that Lewisham and other local authorities have been lobbying central government since the savings drive started, this was on-going but, whether anything would come of it was yet to be seen. Councillor Slater also asked if the CEP only look at discretionary spending and not statutory spending, and was told they look at both. The Head of Financial Services said that officers would not change any policy, nor make any decision that would result in the Council being in breach of its statutory obligations.

 

Councillor Slater said he hoped recruitment monitoring would start with consultants. The Head of Financial Services said that in the past reports on recruitment of consultants had been brought to the Audit Panel, the numbers have since been reduced, but sometimes a very good case would be made.

Councillor Barnham said that the presentation they had at the Public Accounts Select Committee meeting on the Financial Forecast was very good and useful. He said he was surprised that only 21% of the CYP Budget had been spent to date, and asked if this was normal compared to other boroughs. The Head of Corporate Resources said that this was normal given this report was to the end of September and spending would usually be most significant over the Summer holidays with invoices coming through in late September and October. Paul Dale said this was the same for all local authorities. Councillor Slater asked if the presentation could be sent to Audit Panel

members who are not members of PASC.

 

Action >>>> Head of Financial Services

 

Councillor Barnham said the Council seem to have a higher percentage in the Money  Markets compared to the benchmark. The Head of Corporate Resources said the Council’s priority is security, then liquidity, and then return. As a consequence it tends to invest in safer investments and avoids high risk and high returns. He added that officers were now looking at continuing with low risks investments but extending the investment term to take advantage of the better returns for longer (but no more than a

year).

 

Paul Dale asked if allowance had been made for the £10m overspend within the £40m cuts to be made for 2015/16. It was noted that this money would have to be found in addition to the £40m. Paul Dale asked what other options were being considered if the savings can’t be made, and was told the general funds reserves, may have to be used. 2015/16 would be a critical year for eliminating the overspend.

 

The Head of Financial Services said officers were looking at the underspend

within Public Health to see how this money could be utilised in other areas that 

affect health. Councillor Mallory asked why CEP had not been put in place earlier given the amount of savings the council has to make. The Head of Financial Services said after it became apparent that projected spending was of a different order to normal, measures were immediately put in place to strengthen spending control. Given that the Council operates a process of delegated responsibility, the CEP was Considered a last resort. Councillor Mallory asked whether the CEP would continue to scrutinise spending proposals for at least another eighteen months, as he thought this

would help with the savings drive. The Head of Financial Services said he does not think it would be abolished soon.

 

Mr Dale said that local authorities would need to come to terms with the fact that resources would continue to be reduced in future. Councillor Slater said that the council have to think smarter, therefore officers would need to think out of the box if the necessary services were to be delivered. The Head of Financial Services said that transformation was very important in the current climate. He said that this important message had been passed on from senior officers, and a lot of work was being done

on income generation.

 

The Chair asked whether the Head of Financial Services had looked through the budget to see if they were appropriate for the individual departments. The Head of Financial Services said that he had discussed it with the departmental officers but had not gone through everything. He added that the information had been shared with the appropriate Cabinet Members as part of the activity of the Futures Board. He said although this had not been done as a single exercise, it had been done

Departmentally.

 

RESOLVED that:

 

i.              the financial forecasts for the year ended March 2015, and action being taken by the Executive Directors to manage the forecasted year-end overspend be noted.

ii.            the recommendations contained in the mid-year treasury strategy, attached as an appendix to the report be noted.

                         

Supporting documents: