Agenda item

Purpose: To inform the Select Committee of the latest financial performance of the Council.    

The Committee considered the month 4 revenue budget and quarter 1 capital budget as part of the financial performance report (Agenda Item 10).

Andy Walker advised that the Council’s revenue overspend forecast had increased by approximately £250k between month 3 and month 4. 

Nick Carter explained that measures had already been taken as a result of the Government’s in year budget cuts to find savings, including a recruitment freeze, and the ability to find further savings was therefore limited.  Indeed the recruitment freeze was having a limited impact as turnover was low. 

The most significant pressure, which could increase, was within Adult Social Care and it was difficult to reduce the demand for these services.  The underspend experienced in Children and Young People budgets in 2009/10, which helped with the budget position in that year, had not materialised in this financial year.  Similarly, budgets in the Chief Executive Directorate were not seeing significant underspends at this stage. 

The risk fund included a sum of £600k allocated to Adult Social Care, but a significant overspend would still remain even if this funding was drawn down.

Andy Walker explained that the remaining overspend could be covered by general fund balances, but meeting the forecasted overspend would mean that balances would be approximately £1m lower than the ideal level of £6.5m.  This amount was based on guidance from CIPFA (the Chartered Institute of Public Finance and Accountancy).  A view would have to be taken on whether the remaining reserves would be sufficient if this action were to be taken.

It was queried whether more could be done in placing a charge against an individual’s property to help contribute or pay for their care, a particular concern was a property being signed over to a family member to avoid this charge.  Andy Walker agreed to discuss this further with the team responsible for this function.

The actual budget for Adult Social Care had reduced by around £334k since month 3, this was as a result of changes to a joint arrangement with the NHS.  This caused both expenditure and income to reduce by this amount. 

Further clarity was sought on the number of capital depleters that had been budgeted for in comparison to the number coming through.  Also whether a budget existed to allow for new care packages for people with a learning disability (3 new care packages had come through in year for clients previously unknown to the Council).  Andy Walker agreed to provide this information.

It was noted that although a £156k overspend was reported for the Children and Young People Directorate budget, it was expected that the budget would balance by year end as a result of management action.  It was therefore queried why this did not show in the accounts as with other Directorates, which was felt to be a preferable approach by the Select Committee.  Nick Carter acknowledged that there were differing approaches and a need for consistency would be discussed at Corporate Board. 

In the Environment Directorate, a reduction in car park income was forecasted.  The street lighting contract, which was another budget pressure, was in its second year and Nick Carter explained that this was an example of where centralised procurement was less successful than the previous arrangement where Officers in Street Lighting negotiated a less expensive contract directly.  Andy Walker agreed to raise concerns of the Select Committee regarding the street lighting contract with relevant Officers. 

Another concern was the higher than budgeted running costs of West Street House and West Point and whether the purchase of these properties was based on a lower prediction of running costs.  Andy Walker agreed to investigate this issue.   

The forecast underspend in the Chief Executive Directorate had reduced due to a new pressure in land charges income.  The Government had taken a view that fees could no longer be charged for personal searches of the local land charges register and the fee was revoked from 17 August 2010.  A reduction in income was forecast of £49k for the year.  Members had some queries around whether any individuals should be refunded for charges incorrectly made and how the pressure had been calculated.  Nick Carter agreed to provide further detail on this issue. 

Andy Walker explained that a decision had been taken by Corporate Board and the Executive to only produce capital reports on a quarterly basis.  This was felt appropriate as capital budgets moved more slowly and there was less variance from month to month.  The Select Committee raised the importance of continuing to closely monitor capital expenditure, including consideration of any capital budget implications on revenue budgets. 

The capital summary for the Community Services Directorate stated that the majority of the capital budget would be spent by year end.  However, this differed from the information in the budget table and Andy Walker agreed to establish why this was the case.    

Discussion then returned to the timeliness of budget reporting.  Members were advised that they had the most up to date budget position for their consideration, which had been approved by Executive Members at Management Board on 2 September 2010.  The quarter 1 report was formally approved by Executive later in the same day and there was suggestion by some Members that the latest month 4 position could have at least been referred to at Executive, so that any alternative action could have been considered based on the worsening situation. 

In response, Nick Carter gave his view that it would not be sufficient notice to prepare and table a budget report in the timeframe referred to and it was for the Executive Leader to decide whether or not to introduce new material.

RESOLVED that:

(1)       Andy Walker would:

·        forward the Select Committee’s views regarding placing a charge against an individual’s property to the appropriate team;

·        provide information on capital depleters;

·        confirm whether a budget existed for new and unexpected care packages for clients with a learning disability;

·        raise concerns regarding the cost of the street lighting contract with relevant Officers;

·        investigate the running costs of West Street House and West Point and the ongoing impact to the budget;

·        establish why the information on capital expenditure in the Community Services Directorate differed within the report. 

(2)       Nick Carter would provide further detail on the reduction in land charges income.