Agenda item

4.1

Tim Cutler, KPMG, submitted a report from the external auditors summarising the key findings in relation to KPMG’s 2017-18 external audit at Sheffield City Council.

4.2

He reported on a number of significant risks including valuation of property equipment, valuation of pension liabilities, faster close and inverse LOBO (Lender Option Borrower Option) accounting. However, the external auditors were satisfied with the City Council’s responses to these risks and therefore KPMG had concluded that they would be able to sign an unqualified financial statements opinion. KPMG also anticipated issuing an unqualified value for money opinion.

4.3

Responding to a question from the Chair regarding whether the Council was setting reasonable budgets across its services, Tim Cutler stated that external auditors had to look at the arrangements that an authority had in place to set budgets and monitor financial performance. An audit would also look at how the Authority would forecast and cope with demand pressure from outside whilst accepting it was not always within their control. It would also compare this with other local authorities. The Council was doing what it could but there would always be pressures from outside which would impact on this.

4.4

A Member of the Committee then enquired about budget setting within the People Services portfolio and corporately as there had been a significant overspend in the People Services portfolio which had been offset by an underspend in the corporate budget. Dave Phillips, Head of Strategic Finance, commented that there were significant pressures on the People Services portfolio caused by social care pressures. Carers tend to be lower paid and the Council had looked to address this in respect of the minimum wage. However, this had caused cost pressures to the portfolio’s budget.

4.5

Dave Phillips added that there was agreement across all sides that the Council’s approach to trying to reduce costs in social care was the right approach. Early intervention was now the focus. There had been improvements in Delayed Transfers of Care (DTOC’s). However, this moved the costs from the NHS to the Council and the budget did not necessarily move to the Council. Baseline budgets for social care had increased and the issues were common across all social care authorities across the country.

4.6

Eugene Walker, Executive Director, Resources, added that the Council tried to set as realistic a budget as possible. However, the Council was very reliant on the NHS. The Council had improvement plans in place regarding social care and 90% of the savings under the Council’s control were being made. There was not enough join up of the health and social care system and half of the cost pressures were health related. There was a need to get quality interventions in place and keep a level of financial sustainability.

4.7

RESOLVED: That the Committee notes the report now submitted.