Agenda item

(CPT13)

Purpose: To inform Members of the latest financial performance of the Council.

Please note that Appendix 2(e) to this report is confidential and will be discussed under item 18.

Resolved that the Financial Performance Report for Quarter 3 2010/11 be noted.

This decision is eligible to be ‘called-in’.  However, if the decision has not been ‘called-in’ by 5.00pm on 25 February 2011, then it will be implemented.

The Executive considered a report (Agenda Item 7) concerning the latest financial performance of the Council.

Councillor Graham Jones, in introducing the report, stated that during 2010/11 the Council had had its direct revenue budget cut by over £1.05m due to measures taken by the Coalition Government as part of the Emergency Budget.

For Quarter 3 of 2010/11 the Council was predicting an underspend of £393k which was a significant swing from the figure which was last reported to the Executive and the Resource Management Select Committee.  There were two main factors for this underspend – firstly, following a change in the accounting guidelines the Council had been able to move net just under £1.5m from the revenue budget to the capital budget. This amount related to expenditure on planned highways maintenance which would enhance the district’s road infrastructure over the next ten years. This change in accounting procedures had brought the Council’s financial position to a break even position. Secondly, in early January 2011 the Department of Health had announced a one-off sum of money for the additional pressures, due to the winter, on the adult social care and health system and was a benefit to the Council of £326k. This additional funding had helped the Council in achieving a forecast underspend position.

Councillor Jones referred to the 2011/12 Budget paper which would be considered later on the agenda and stated that it would be necessary to utilise some funds from the general reserves in order to balance the budget. However, the underspend would assist in offsetting some of the impact of using these reserves to ensure the Council maintained and adequate and appropriate level of general reserves.

Councillor David Betts reiterated that the decision to capitalise the highways maintenance element of the budget had been based on accounting procedures which would guarantee future expenditure on West Berkshire roads. 

Councillor Joe Mooney reported that the large overspend in Community Care had been considerably reduced. However, Councillor Mooney had requested that the expenditure in respect of Learning Disability and Adult Social Care should be shown separately in order to make the tracking of these elements much simpler. The Government had made £162m available to cover the winter pressures in adult social care and the health service and the share which had been allocated to West Berkshire would help considerably in this area.

Councillor David Rendel queried when the decision on the capitalisation of highways maintenance expenditure had first been made. He also queried why this expenditure variance had been shown in the levies and interest line and he queried why amounts were accrued but not spent. Councillor Graham Jones responded that the capitalisation of highways maintenance expenditure had been referred to in at least two previous reports which had been considered at the Resource Management Select Committee and this measure had been undertaken on advice from the Council’s Auditors. Andy Walker confirmed that the IFRS had released the guidelines at the end of December and Officers had then needed time to interpret the advice. This had been the first available Executive meeting to bring the proposed change in procedures forward to. Andy Walker advised Councillor Rendel that the reason that the amount was reported below the line was purely an issue of timing. The highways revenue budget had been reduced accordingly. In respect of accruals Andy Walker explained that the amount of accruals was lower than in previous years.

Councillor Keith Woodhams referred to page 128 of the agenda and the planned reduction in some highways maintenance activities of £250k. He queried whether this reduction would affect pot hole repairs. Councillor David Betts confirmed that the reduction would not affect pot hole repairs. The £250k reduction had been achieved across a range of highway areas but would not have an effect on the roads budget. The month of January had been relatively mild and work had commenced on an additional patching and repairing programme. A refund had also been received from SSE in respect of lighting costs.

Councillor Julian Swift-Hook welcomed the windfall from the Department of Health which would assist with the pressures in Adult Social Care.  However, it was noted that there was still an underlying overspend in the region of £1.8m. Page 124 of the agenda referred to the Royal Berkshire Hospital Foundation Trust (RBHFT) intending to fine local authorities for official delayed transfers which would be in the region of £100 per day. This was a change on the previous situation and he asked for clarity in that area. Councillor Joe Mooney responded that the £100 fine was for bed blocking. However, since the report had been written the number of people bed blocking had reduced to one. It was therefore unlikely that West Berkshire would be fined and indeed the Royal Berkshire Hospital had been working closely with West Berkshire Council to reduce the amount of bed blocking. In respect of capital depleters Councillor Mooney reported that last year the Council had had eight of these. Every four capital depleters equated to £100k additional spend on the budget and currently the Council already had 14 this year with 6 pending and a further two or more expected to come through the system.

RESOLVED that the Financial Performance Report for Quarter 3 2010/11 be noted.

Reason for the decision: To ensure that Members are fully aware of the latest financial position for the Council.

Other options considered: None.

This decision is eligible to be ‘called-in’.  However, if the decision has not been ‘called-in’ by 5.00pm on 25 February 2011, then it will be implemented.