Delivering on budget for any organisation is always a success, especially one the size of Derby City Council – this is the expectation for 2017/18 ( reported in the Cabinet meeting 14 Feb 2018).
Throughout the year it will have constantly been challenged by unforeseen pressures, missed opportunities, and helped by favourable outcomes. Accomplishing every line item in the budget exactly to the original plan is nigh on impossible.
A review of the “ups and downs” that have resulted in the plan being delivered in 2017/18 is enlightening. Hopefully it gives an insight into the fact that the budget is not an exact science. Any changes cannot easily be attributed to a single “cause and effect”, and small percentage swings are, in fact, large numbers.
The Council’s budget for 2017/18 was £220m. The movements below represent “noise” within + or – 4% of that total. This is a small movement. This is a summary of the overall paper issued to the Cabinet ( the full detail is publicly available)
UNEXPECTED COSTS: (TOTAL £8.5m extra cost)
- Growth in Adult Social Care / Vulnerable Children’s services demand £4m (~ 5%)
- Corporate Governance costs: ( Total £2.13m)
- Internal audit, insurance, legal services, coroner’s feed and HR casework £1.34m
- Asset Valuations programmes £0.3m
- Increased demand for Business Support £0.49m
- Planned savings/improved income not delivered (Total £1.64m)
- Review of Libraries £0.34m
- Moorways £0.1m
- Garden waste £01.m
- Housing Management/repair services £0.3m
- Not acquired housing stock to increase rental income £0.4m
- Income from Leisure Centres £0.4m
- Other Costs (Total £0.73m)
- Staffing budgets £0.24m
- Increased Housing Benefits £0.49m
UNDERSPEND (TOTAL £8.4m saving)
- Treasury management £6.4m
- Corporate Contingency reduction £2m
The Council has a lot of flexibility within its Corporate function which manages the loans/ reserves etc ( total loans are £461m and investments are £84m) – this can readily give rise to funds by changing bases for accounting or the way loans are managed. In 2017/18 this created an £8.4m opportunity during the year. Nearly 50% was spent on additional Adult Social Care and Children’s services. Much of the Council’s historical failings raised within the Audit reports, resulted in an additional cost of around £2m.
A number of the Council’s cost saving / income generation ideas didn’t deliver to plan. They might have been too ambitious/ unachieveable or beset by unfortunate “road blocks”. All of that only created a burden of £1.64m.
It is worth noting that the “necessary” saving from Libraries wasn’t delivered. At March 2018 , all libraries will still be Council run, and by the 40+ paid employees. This is testament to the fact that the savings from the Libraries were not required as a result of Central Government cuts to deliver the budget. It represents such a small percentage of the total and is swamped by creative financial manoeuvres, and the unfortunate consequences of poor corporate governance and asset management; these are well within the gift of the Council to control.
Sadly, despite all of this, many voters will still think that every change is driven by one single cause – Central Government funding.