Agenda item

To receive for information, the latest monitoring position on both the revenue and capital budgets and to agree necessary changes to the capital programme.

Cabinet received a report providing the budget monitoring position for November 2015-16 for the revenue and capital budgets.

Ms Susan Carey, Deputy Cabinet Member for Finance and Procurement was in attendance in the absence of Mr John Simmonds, Cabinet Member and she introduced for Members the key information to which they should have regard. In particular, she highlighted the following in relation to the revenue budget:

i           The savings target for 2015/16 was £83m, which was an extremely challenging target. The net projected variance against the combined directorate revenue budgets was an overspend of £0.861m, a reduction from the quarter 2 projected overspend of £6.609m, before management action.

ii          Management action was expected to reduce this overspend to an underspend of -£0.539m. However, there was some minor re-phasing of budgets, which would need to be rolled forward to 2016/17 in order to fulfil legal obligations (detailed in section 3.7 of the report); therefore, this changed the position to an underspend of -£0.231m as shown in the report.

iii         There was some significant underspending within the forecast, which was detailed in section 3.8 of the report, which would ideally be rolled forward to continue with these initiatives in 2016/17 but this would only be possible if the Authority as a whole was sufficiently underspending by the year end. If this was allowed for, then this changed the position to an underlying overspend of £1.036m.

iv         Directorates had been tasked with coming up with further management action to balance the position.

Ms Carey also commented that the report contained mixed messages; the position had improved significantly, by £5.5m after allowing for assumed management action and roll forward requirements, which was extremely good news, but the majority of the improvement was in respect of the release of £4.2m of uncommitted Care Act monies resulting from the Government announcement to delay the implementation of phase 2 Care Act reforms. She stressed, however, that the draft funding settlement for 2016-17 was awaited before releasing this money in case it was assumed in the settlement that this funding would be required for future social care pressures such as the National Living Wage.

Ms Carey also referred to paragraph 3.6 on page 54 of the report, where it was noted that high waste volumes experienced during 2014/15 had continued into the first 8 months of 2015/16 with a forecast overspend of £2.063m currently reported. However, this was more than offset by savings on management fees at waste disposal sites, in-vessel composting, higher than anticipated income from recyclables, lower cost of waste to energy disposal, contract savings at Household Waste Recycling Centres and transfer stations and a re-phasing of works at closed landfill sites into 2016/17, resulting in a small net underspend on the waste budgets of -£0.020m.

She also referred to the details of the proposed roll-forwards/re-phasing required to complete existing initiatives as detailed in paragraph 3.8 of the report.

Mr Andy Wood, Corporate Director of Finance and Procurement stated that he shared Ms Carey’s confidence that the overspend would be eliminated by the year end and that the release of the £4.2m of Care Act monies was welcomed but the underlying position remained to be resolved. He added that the warmer than usual winter to date had resulted in a small underspend of -£0.5m as a result of fewer salting runs than had been budgeted. However, Mr Wood also stated that the dividend from Commercial Services wasn’t looking as promising now due to lower than anticipated profits in the LASER business. Finally, he reminded Members that it would be good to take an underspend into 2017/18, which was looking even more challenging than 2016/17.

The Leader, Paul Carter, thanked Ms Carey for her comprehensive overview. He stated that the revenue position overall was in a much better place now compared to 3 or 4 months ago and that the management action taken had been no mean feat and he offered his thanks to all concerned.

Ms Carey spoke to the item once more in relation to the current and projected position on the capital budget and, in particular, drew Members’ attention to the variances and proposed re-phasing of capital spend set out in the table in paragraph 4.2.

No further comments were made.

It was RESOLVED that: