Agenda item

Quarter 2 Financial Report


Councillor Hebb introduced the report and highlighted the three main points. He stated that the first point was the financial health of Thurrock was strong, as there was currently a surplus. He stated that the second point was Thurrock’s handling of the economy which meant that a modest 1.49% rise in Council Tax was needed to maintain services such as weekly bin collections and the timely fixing of potholes. He commented that the third main point was Thurrock’s commitment to delivering funding for new police officers in town centres and communities across the borough.

He stated that this report looked back at the financial health of Thurrock since the last budget had been agreed in February 2019, and there were currently pressures within some services, although the budget as a whole was forecast to be balanced. He stated that one of the main directorates that was experiencing financial pressure was adult social care, as pressures were external and outside of the councils control. He commented that this was due to a few high-need, high-cost placements, which could push the budget envelope. He added that this was the first time in many years that the service would experience overspend, and the budget was being handled well despite external pressures, and the fragility of the domiciliary care market. He felt that the most important factor for adult social care was that good quality care was provided, and the financial budget had to be a secondary concern.

Councillor Hebb then moved onto discussing the pressures within children’s social care, which although was overspending by £900,000 had reduced their overspend compared to previous years. He felt that this directorate was very fluid, as a few high-need placements could again push the cost envelope. He congratulated the team on their ‘good’ OFSTED rating, and felt that the investment in the system highlighted in the report would help to sustain this level of achievement and help to achieve the ‘excellent’ rating in the future. He added that lots of investment had also occurred in the environment directorate, such as for street cleaning and parks, but was still under-budget and thanked the team in the hard work dealing with market pressures. Councillor Hebb added that due to the Homelessness Reduction Act, Thurrock had seen an increase in the number of people presenting as homeless, but Thurrock were working hard to tackle this in line with the central government strategy.

Councillor Hebb stated that Thurrock were predicting a surplus for the next three years, and if this occurred, it would mean a balanced budget for a total of seven years. He elaborated that this was due to reform of services, as well as investment, and this led to the ability for a one-off spend on more policing. He added that corporate projects totalled £112million spending for new infrastructure and projects that were outlined in appendix 2 of the report, and included the regeneration of Purfleet and Grays, A13 east-facing slips, 21st century care homes and new schools. He added that he had met with the Leaders of opposition parties to discuss surplus spending and they had agreed on the majority of ideas, findings of which would be published next month. He added that to facilitate necessary elderly care, the report proposed a 2% rise for the adult social care precept. He summarised and stated that pressures were being managed to ensure the budget was balanced and there was a surplus to spend on projects such as additional police officers. He clarified that the 1.49% council tax rise would be ring-fenced spending. He finally thanked those departments which were under-budget as these helped to support the councils wider goals.

Councillor Halden felt that it was good to see a balanced budget and surplus, and stated that the proposed council tax rise was still below inflation. He also stated that there had been no council tax rise in 2018/19 and no maximum increase the year before, which only 5% of councils had managed to achieve. He highlighted the pressures within the Dedicated Schools Grant, and stated that this was because there had been a 35% increase in requests for Education, Health and Care Plans, and a 24% increase in requests for placements in special schools. He felt that although there were many pressures, the team were trying hard to reduce the debt. He added that all special schools across the borough had maintained their ‘excellent’ OFSTED rating even with new, tougher criteria. Councillor Halden added that there were plans to build a new special school called Treetops 2, as well as the infrastructure to support this in Blackshots. He stated that 2020 was the ‘Year of Inclusion’ and this scheme was being launched soon, which would involve more investment in schools, to ensure more rigorous standards and more timely processes for requests. He stated that statutory guidance for processing education requests was 20 weeks, but Thurrock wanted to cut this in half to stem late crisis referrals and build a more responsive system.

Councillor Watkins thanked the Deputy Leader for his report, and stated that the environment directorate had increased their revenue compared to the last administration, which he felt had been understaffed and underfunded. He commented that the KBT scores needed to be improved, but the team had worked hard for worthwhile investment, such as new street sweepers. He added that officers were being taught about KBT scoring systems, so they could self-monitor as part of the ‘Think 4 5’ Strategy. Councillor Watkins summarised and stated that there were overall market pressures in waste disposal that the team were aware of and working to mitigate, as well as working closely with partners and the Waste Management Working Group to look at the future of waste in Thurrock.

The Leader welcomed the report and the ring-fencing of the proposed council tax increase for the three strategic priorities, as many residents often asked where their council tax went, and now Councillors could give a clear answer. He was also pleased to hear that there was alignment between the Cabinet and opposition leaders, as they had many of the same ideas and could work together for maximum impact. He stated that areas of overspend were being worked on, but this could prove difficult in pressure-led directorates. He summarised and felt that Thurrock were in a good position compared to other councils, and felt it was good to see tax-payers money being used to invest in services across the borough. 

RESOLVED: That Cabinet:

1. Noted the revenue forecast outturn position for 2019/20 and that further mitigation is required to outturn within the agreed budget envelope

2. Noted the proposed updates to the Medium Term Financial Strategy

3. Noted that the updated Medium Term Financial Strategy forms the basis of the 2020/21 Budget and asks Corporate Overview and Scrutiny Committee to comment and make recommendations back to Cabinet in February ahead of Full Council

4. Following Cabinet’s decision in December 2018 to allocate funding for additional police officers that the Director of Environment and Highways, in consultation with the Corporate Director of Finance, Governance and Property and the Leader, be authorised to enter into a four year contract (with the right to renew for another 4 years)

5. Noted the results of Treasury Management activities undertaken in the first half of 2019/20

6. Noted the capital forecast outturn position and the overall position on the approved proposal.

Reason for decision: as outlined in the report
This decision is subject to call-in

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