Highland Council Budget To Be Brought On Track For Year End Balance

27th February 2019

Despite an increase in the reported in-year overspend of £5.5M at the end of the third quarter, the Council is committed to bringing the budget back on track to be in a balanced position by year end.

Additional measures to address the projected overspend began back in November, with vacancy controls, restricting non-essential expenditure, stopping non-essential travel and utilising (previously) earmarked balances. Agency and overtime spending has also been significantly restricted.

The challenging position is largely attributable to a review of the expected costs of looked after children and an overspend on the budget for additional support needs. Whilst the Council has been successful in bringing some children back to the Highlands, unfortunately other children have had to be placed out with the area in expensive placements, thereby offsetting the planned reduction in costs.

Work continues to close the budget gap by the year end and a review of earmarked reserves will take place to see if any funding previously set aside can now be released for general use.

Budget Leader and Chair of Resources, Alister Mackinnon said:"I am confident that the correct measures are in place to bring the budget back into line. Some of the measures have been very difficult for some areas and I appreciate the efforts by many staff to improve our position. We simply cannot afford to weaken our Reserves, so it is imperative that we continue with these restrictions for several more weeks and we need the commitment from everyone across the Council to achieve a balanced position."

Chief Executive Donna Manson added:"The Corporate Plan will be coming to council next week and this will focus on scrutiny and driving performance. This and our Programme of Change will underpin the work of the council moving forward, ensuring that we use all our resources to the best effect to ensure we are an efficient, responsible and sustainable organisation."

How it will be done fr om the council paper -

Management Actions to deliver a balanced budget

4.1

The worsening position since quarter 2 has been monitored by the Council's Executive leadership team and a suite of management actions introduced. It is hoped that these actions will impact positively on the forecast outturn position in the remainder of the year.

4.2

Extra recruitment controls have been introduced in the short term where jobs are only put to advert if deemed essential. This has been backed up by a restriction on recruiting agency staff. This measure has seen a significant reduction in the number of posts being advertised. As part of good budget practice a number of service budgets do however have staff turnover or vacancy management savings elements which need to be delivered prior to any additional savings being realised.

4.3

A freeze on non-essential spend until the end of the year covering a wide range of expenditure types has also been implemented. Directors have instructed the effective implementation of this approach within their service areas. The effects of this action have already been seen in a number of areas, not least in the amount of travel undertaken across the organisation.

4.4

A review of all the Council’s reserves and balances has been initiated. In particular this review will focus on earmarked balances, i.e. those held for a particular purpose, to ensure they are still being held appropriately. Any balances found to be surplus to requirements will be transferred to non-earmarked balances or used to address budget pressures in the current year.

4.5

Under consideration as part of the review of earmarked balances is the Devolved Schools Management (DSM) balance. These balances represent historic accumulated under or overspends against school budgets. As a way of dealing with the significant pressures facing the Council discussion has been ongoing wit

The paper with details of finances can be seen at-

https://www.highland.gov.uk/meetings/meeting/4088/corporate_resources_committee

A webcast of the meeting is available at -

https://highland.public-i.tv/core/portal/webcast_interactive/407907

PHOTO

Councillor Alister Mackinnnon, Chair of Resources, Highland council