29th August 2018
The Corporate Revenue Monitoring Statement for Quarter 1 (Apr - June 18), has been considered by the Council's Corporate Resources Committee. The paper sets out actions to address the projected 1% overspend of £5.1m.
Each of the Council's Service management teams have been tasked with taking the action necessary to achieve a balanced out-turn and have developed a plan to reduce expenditure and to increase income. Many of these actions will involve deferring non-essential spending, accelerating savings, and restructuring recruitment as indicated above. Every attempt will be made to minimise the service impact but members were advised that some impact on service is inevitable.
Budget Leader Cllr Alister Mackinnon said: "Services need to work within their budgets and the measures set out are designed to ensure that this happens. The Council’s reserves at around £8m are well below the minimum level recommended by Audit Scotland and it is vital that they are not depleted further by a year end overspend.
"I am confident however that we can deliver an improved situation by addressing the issues thoroughly now. We must remember that, although this is a serious issue which must be corrected urgently, this is 1% variance on our budget and it is common to expect a small deviation early in the financial year.
“We are not alone - all Scottish councils are facing financial problems. We have been and will continue to be open and upfront about the difficulties we face and I am inspired by the savings ideas that staff have come forward with.
“The budget team has an open door to ideas from members across the chamber and it is important that we all work together to deliver a balanced budget and to find ways of rebuilding our Reserves."
Cllr Mackinnon went on to say, “Our budget was set to protect jobs and we will continue to aim to continue to use redeployment where possible to avoid job losses."
Leader of the Council Margaret Davidson said: “I would like to thank Directors for coming forward with plans for corrective measures and thanks to the finance team for their early action in flagging up the very serious financial challenges so that these might be addressed at an early stage in the financial year.
“The biggest overspend concerns Looked After Children accommodated out of Highland. A plan to bring some of the children back to the Highlands and to improve the outcomes for these children, needs to be accelerated. We need to simultaneously be more efficient and make the best decisions for some of our most vulnerable children.
We will also continue to press the Scottish Government to give Local Authorities a fairer share of funding.”
An update on progress will be reported to the next Resources Committee in November 2018 reflecting the Quarter 2 updated forecasts.
Controls to reduce the overspend include:-
Escalation of recruitment controls.
Escalation of controls on overtime and extra hours beyond those contracted.
Review of all agency appointments
Tighter controls on travel
The position at this stage last year was a projected overspend of £2.678m.
Forecasting so early in the year is difficult and we have historically seen an improvement between the Q1 forecast figures and the actual position seen at year end. The projected overspend represents under 1% of the revenue budget and this has been identified early in the year.
There are 3 main areas of projected overspend:-
Care and Learning £2.772m largely relating to high cost placements for “Looked After Children”.
Community Services £0.611m which includes shortfalls against savings in car parking and public conveniences not yet taken
Unallocated Corporate Savings £1.745m mainly in Service Redesign but also including unallocated procurement and asset management savings.