Management of Key Risks Appendix 1

Budget Assumption / Risk Identified / Management / Action
Inflation and interest rates / a)The non teachers’ pay award has not been announced for the next financial year
b)Inflation on energy costs
c)Future interest rate movements / Through the Council’s budget monitoring and control arrangements. / a) The non teachers’ pay award of 2.45% (which is line with the budgetary provision) has been implemented despite the fact that no agreement has been reached and the matter has now been referred to ACAS for a binding decision to be made.
b)The high cost of fuel is putting pressure on the Environment budget.
c) The global financial crisis and the cut in base rate will impact on the level of investment income.
Pay Review / The pay bill and value of claims as from 1 April 2007 is unknown. / Decisions re pay line will be made based on budget available. / The new pay structure has been implemented and additional budget allocated to services. However, the value of claims is still unknown.

Service specific savings:

a) Rationalisation of Adult Social Care pay allowances
b) Vacancy management and management restructures
c) Increase fees and charges such as:
Adult Social Care
Leisure
Car Parks
Court Costs / Dependent on outcome of trade union negotiations
Negative impact on staff morale
Reduced ability to provide services
Client withdrawal from services / Corporate negotiation mechanism set up.
Re-prioritise services to lessen impact
Develop means of monitoring impact on clients. Communicate changes and implications effectively / The saving will not be achieved this year due to negotiations at a corporate level. Other actions are being taken to manage the shortfall.
All vacancy management/departmental restructure savings will be realised before the end of the financial year.
It is anticipated that the savings will be realised.

Service Pressures:

a) Provision has been made in the budget to cover those services which are overspending in the current year e.g. out of county placements / Demand for these services may continue to exceed level of funding available / Through the Council’s budget monitoring and control arrangements / The demand for out of county placements has significantly increased and the budget is projected to be overspent. This demand is robustly managed through a joint commissioning panel which has finance officer representation. The matter has been reported to the Children and Young People Scrutiny, Finance & Performance Scrutiny and the Executive Board.
Capital Financing costs / The level of borrowing is based on level and timing of other sources of funding e.g. capital receipts and grants. These may be subject to change. / Through the member/ officer working group consideration and recommendation to the Executive Board / Capital Financing costs are lower due to additional investment income