Agenda item

Purpose: To consider any items called-in by the requisite number of Members following the previous Executive meeting on 16 June 2011.

The Commission considered a report (Agenda Item 5) concerning the Call In Item EX 2166 - Provisional Outturn Report 2010-11 which was submitted to Executive on 16 June 2011. 

Councillor Brian Bedwell expressed surprise that this item had been called in for scrutiny.

Councillor David Rendel outlined the reasons for calling in the Provisional Outturn Report 2010-11 as follows:

1.                    There had been no proper discussion of why the underspend shot up between Month 9 and year-end by nearly £1million;

2.                    In particular, no explanation had been given in public about why the underspend on “Levies and Interest” of over £1.7 million (approximately 37% of the budgeted amount);

3.                    There had been no proper discussion of what lessons needed to be learnt to avoid the next year's budget being set on the basis of such inaccurate figures in future;

4.          There had been no indication that the Executive understood the importance to the local economy in a time of economic difficulty of spending its full budget;

5.         There had been no acknowledgement by the Council that the report contained an error worth over £350,000 which had not been corrected at the time they took their decision to accept the report.  

The Executive Member for Finance, Property and Health and Safety, Councillor Keith Chopping responded as follows:

1.                    The budget underspend between Q3 and year end increased by less than £300k which represented less than 1/3 of one percent of the overall budget spend;

2.                    Month 10 report had been reviewed in public by the Resource Management Select Committee which included a half page explanation on Levies and Interest;

3.                    He did not accept that the 2011/12 budget assumptions were based on inaccurate figures;

4.                    The Council’s four directorates had overspent their individual budgets by over £500K;

5.                    He accepted that the figure on page 19 of the report was wrong.  This was clearly an error in presentation and not an error in calculation.

Councillor Tony Linden commented that an underspend did not imply there was money available that could be spent elsewhere. The Council was facing a very challenging year and there was a need to be prudent.

Councillor Quentin Webb stated the underspend was a very low variation at less than 0.6% on the Council’s net budget. The Opposition did not question the matter at the time and there was no decision to be made.

Councillor Jeff Brooks responded that the final quarter performance showed significant changes compared to the month 9 forecasts – three directorates had predicted overspends and these had disappeared by year end. The Chief Executive’s directorate finished with a £427K underspend and this happened year after year. There was a need to improve the budget process and financial management to avoid major changes in expenditure in the last quarter.  He proposed that the budget should be scrutinised by the Resource Management Working Group (RMWG).

Councillor Tony Vickers commented, as the Chairman of the RMWG, he was looking forward to scrutinising the budget. There was a need to detail the reasons why the underspend had occurred and to provide an explanation that the public could understand.

Councillor David Rendel responded to Councillor Chopping’s remarks:

1.      The Outturn report should be taken to the RMWG and a proper explanation should be determined as to where and why the variances had occurred.

2.      There was no proper explanation of the variance on for Levies and Interest in the Outturn report or papers

3.      It was important to use accurate figures in the budget process and there was a need to discuss and understand the lessons learnt.

4.      The underspend was against the Council’s full budget not the individual directorates.

5.      The Outturn report contained an error of £350K.

Councillor Keith Chopping restated that there was only a typing error where a minus sign was omitted and the calculation was correct.

Councillor Quentin Webb commented that there was no value in further discussion and proposed that no case had been made to refer the Outturn report back to the Executive.  Councillor Tony Linden seconded the proposal.

At the vote the proposal was carried.

RESOLVED that: no case had been made to refer the Outturn report back to the Executive.

Councillor Jeff Brooks proposed that budget should scrutinised by the RMWG.  Councillor Rendel seconded the proposal.

At the vote the proposal was defeated.

RESOLVED that: the budget would not be taken to the RMWG.