Agenda item

Purpose: To investigate the underspend in the Directorate budget in previous financial years and to consider the current position. 

The Committee considered a report (Agenda Item 6) concerning the underspend within the Chief Executive Directorate budget in previous financial years and the current position.

This was raised by the Committee as a concern at a previous meeting, particularly due to the increased underspend in the latter part of previous financial years.

Nick Carter provided the following information:

·                         An underspend of £22k was forecast at month 9 in 2008/09.  The outturn position was £104k underspent.  This was felt to be a reasonable increase. 

·                         There was often a call for expenditure restraint during the third and fourth quarters of the financial year, namely with recruitment costs and discretionary spend, to help meet overspends within other Council directorates and services.  There was an expectation within the Executive that the support service functions within the Chief Executive Directorate would help meet necessary savings, above more front line services which might have essential posts needing to be filled.  Vacant posts could impact negatively on performance levels.   

·                         There was a more significant increase to the underspend in 2009/10 than in previous years.  The month 9 forecast was an underspend of £133k and the outturn position was £416k underspent.  This varied by service area, with the most significant underspend increase in Policy and Communication (£104k at month 9 and £220k at outturn).  This was primarily due to savings with the CCTV contract and the fact that underspends had not been fully reported at month 9 in some parts of the service. 

·                         The Chief Executive Directorate was set a savings target of £125k.  This helped to ensure that the Council’s budget balanced in 2009/10. 

·                         The £416k underspend was not built into the 2010/11 budget.  These savings would only be retained if agreed as part of the 2010/11 budget.   

·                         Each service had a managed vacancy factor (MVF) of between 3-3.5%, this was based on turnover.  However, the level of turnover was reducing and some services had been required to meet their MVF target from elsewhere within the budget.  MVF savings were separate to the service reductions already discussed and increasing MVF targets had not been considered.     

·                         The current forecast for 2010/11 was an underspend of around £100k.  No significant changes were expected later in the financial year, part of this was due to a reduction in turnover. 

Members felt that some analysis should be undertaken to assess whether the increased underspend between month 9 and the outturn position in recent years was a clearly identifiable trend.  This could enable money in the Chief Executive Directorate budget to be allocated to pressures elsewhere in the Council. 

Nick Carter agreed to provide additional data on the previous four financial years in time for the next meeting to help analyse whether this was the case.  This would be detailed by service from months 3 to 12. 

Andy Walker added the following points:

·                       The month 9 forecast had been used to help inform savings to assist with the outturn position and would be used again in future.

·                       The Directorate budget had reduced over recent years. 

·                       Benchmarking data showed that the Council’s Chief Executive Directorate budget was in the lowest quartile. 

·                       Service areas were efficient and there was not felt to be unnecessary slack in the budget. 

A concern was raised by a Member that there should be no reliance on the Chief Executive Directorate finding savings as this might not always be the case in future years. 

RESOLVED that Nick Carter would provide additional data on the previous four financial years in time for the next meeting.  This would be detailed by service from months 3 to 12 to help identify any trends.