Agenda item

Discussion:

The Chief Finance Officer introduced this report which asked Members to approve the Council’s draft Statement of Accounts for 2015/16. Referring to the addendum report he advised that the adjustments essentially related to two errors which were immaterial in audit terms. Noting the previous reservations expressed about capacity, he commented that he had received the draft statement of accounts on 10 June for sign off, which was a considerable achievement given the shortened and challenging timescales. Members congratulated the finance team on this achievement, particularly given that a number of senior members of the team had left the Council in the past 12-18 months.

A Member referred to the overspend in children’s social care (£3.75m) and made the point that this repeated overspend was unsustainable. The Chief Finance Officer commented that costs had escalated in the second half of the year but quarter one feedback so far showed the number of looked after children was starting to reduce. The new Assistant Director for this service was confident measures would be put in place which would reduce costs.

A Member asked about the timescales for the ICT infrastructure works mentioned in relation to the Better for Less overspend. There was a £6m budget for digital transformation over a three year period and this included the cost of the ICT infrastructure works. 

Clarification was sought on the public health budget and Members were advised that the Public Health Team had managed the reductions in grant and this had resulted in a year end underspend. As there was a need to demonstrate that public health grants were spent on services which delivered a public health outcome, the under spent grant had been reclassified against services which achieved that.

A Member referred to the under achievement of income of £230,000 in leisure and culture and acknowledging the impact the private sector considered this was still a significant sum. His concern was this could threaten the viability of council leisure services. The Chief Finance Officer commented that a decision had been taken to remove the £1m subsidy allocated to this service and as a result work had started to increase income and reduce costs. .

A discussion took place about the overspends in Medway Norse, Category Management and Better for Less.  The Chief Finance Officer commented that the Better for Less programme had lasted three years and therefore the savings target had been overtaken by the wider budget process. A lesson learned for the Digital Transformation programme was to ensure that savings were not double counted as had happened with some of the category management savings. Therefore savings which were as a result of digitalisation would be classed as such. A one off investment of £6m had been allocated to the capital programme for Digital Transformation and it was expected that this would lead to a reduction in the revenue budget by £7m pa. Whilst Medway Norse had seen a growth in its business this had been affected by other pressures such as the national living wage, which had reduced the joint venture’s profit. The challenge for Medway Norse was to increase the amount of external business.

Members discussed how public bodies in Medway acting together could achieve savings by one body making an investment which yielded savings for another. Whilst the benefits of such an approach were recognised so too were the complexities in terms of budgeting and decision making in how such savings were allocated.

The revised approach to how senior officer remuneration was reflected in the accounts was welcomed. (See minute No 886 – March 2016)

Decision:

The Committee agreed to:

a)     note the revenue and capital outturns as reported and;

b)     approve the draft statement of accounts for 2015/16.