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Agenda item

Financial monitoring report - quarter 1


Paul Dale, Assistant Director of Resources, provided a brief introduction to the report and drew attention to the increase in the underlying service overspend. He laid round an updated table setting out the summary position as at 30 June 2015 (paragraph 2) and a cash flow forecast. Both these documents will be published on the website alongside the meeting agenda.


In response to questions about the underlying service overspend, Paul Dale said that on a like for like basis compared to the previous month it would be £2.3m but it had been reduced by transferring monies and the overall year end forecast is a net £0.5m underspend.


Environment and Regeneration

Paul Dale highlighted the overspend forecast for waste services. In response to a question, he said that the income target for commercial waste had been replaced by an alternative saving.


Task group members expressed concern that the income target for commercial waste had not been met and wondered if the target was realistic and whether there was more that could be done to optimise revenue, including through looking at what other boroughs are doing. Members identified this as an area for further scrutiny.


In response to a question about the operational cost of the waste transfer station, Paul Dale said that the energy from waste plan should provide a solution.


Task group members noted the continuing, though smaller,  mismatch between the Greenspaces budget and service delivery.


Children, Schools and Families

Paul Dale alerted members to the high overspend in children’s social care due to increased caseloads and rise in cost of placements. He said that the SEN transport budget had been increased in response to overspend in previous years, arising from increased demand.


Task group members requested further detail on SEN and adult social care transport costs, client numbers and forecasts for the future so that these could be scrutinised. This was identified as an area for further scrutiny at a future meeting.


Paul Dale undertook to find out whether Merton was part of a Londonwide scheme on the terms of engagement of social workers. ACTION: Assistant Director of Resources


In response to a question about the impact of redundancy costs on the General Fund, Paul Dale explained that as, well as redundancy payments, any loss to the Pension Fund had to be covered by the General Fund.


Community and Housing

Paul Dale said that the £2.2m of underachieved savings last year were unlikely to be delivered this year. He added that the department was more optimistic about delivering the 2015/16 savings.


Members agreed that they wish to monitor the delivery of savings in more detail at a future meeting in order to understand why some savings were not being delivered. This knowledge would be helpful for scrutiny of the budget process for future years.


In response to a question about the public health budgets, Paul Dale said that these had not been particularly well aligned to responsibilities when the funding was transferred to the council. The government may take some of this money back but it is not clear at present how much or when.


Capital programme

Paul Dale said that the capital spend for the first three months this year had been lower than in previous years and that the forecast for the year, with an underspend of £3.7m, was therefore optimistic. He explained that the structure of the capital budget had been improved in recent years and set out the main causes of slippage. He added that the corporate services budget included acquisitions and bidding funds that may not be needed but provided the council with flexibility as and when purchase or bidding opportunities arose.


Members requested a short briefing paper be provided to a future meeting to explain how the capital programme works and its relationship to the rest of the budget. Paul Dale undertook to provide a worked example and Julia Regan undertook to look at previous minutes for any text that would be of assistance. ACTION: Assistant Director of Resources and Head of Democracy Services


Delivery of savings for 2015/16

AGREED to defer discussion of this and have it as the first item of business at the task group’s next meeting.

Supporting documents: