Issue - meetings

3 - Report by Mr John Simmonds, Cabinet Member for Finance and Lynda McMullan, Director of Finance )

(1)       Mr Simmonds briefed the meeting on the main points arising from this report and highlighted in particular some of the areas of potential pressure in Directorate budgets.

(2) The provisional outturn on the revenue budget showed an under spend of £8.826m (excluding schools) which was some £0.959m higher than the projected under spend reported to Cabinet at its meeting in May. Mr Simmonds also referred to the Capital Budget Outcomes and achievements as detailed in paragraph 7 of the report.

(3)       Mr Simmonds said the overall budget situation was therefore balanced with sensible levels of reserves. This was the tenth year in succession the County Council had maintained its budget in limits and he placed on record his thanks to officers for the part they had played in that achievement. Mr Carter also placed on record his thanks to both members and officers in bringing in a balanced budget with an under spend of some £8.8m on the revenue side.

(3)       Resolved:  

(a)       That the provisional outturn position for 2009-10. be noted

(b)       Agreement be given to the £1.453m requests for roll forward of the 2009-10 revenue under spending to fund existing commitments, as detailed in Appendix 2.of the Cabinet report

(c)        Agreement be given to the revenue under spending within the Finance portfolio being held in a new Corporate Restructuring Reserve (as detailed in section 3.4.1 of the Cabinet report ).

(d)        Agreement be given to the remaining £5.373m of the 2009-10 revenue under spending being set aside in the Economic Downturn reserve.

(e)        it be noted that that £2.415m of capital re-phasing from 2009-10 will be added into 2010-11 and later years, as detailed in Appendix 3 of the Cabinet report and the 2010-11 Capital Programme would also be adjusted to reflect other 2009-10 variances as reported in the outturn.

(f)         the final monitoring of the key activity indicators for 2009-10 as detailed in Appendix 4.of the Cabinet report be noted; and,

(g)       the final financial health indicators for 2009-10 be noted as detailed in Appendix 5.of the Cabinet report, and,

(h)   Cabinet place on record it’s thanks to Officers for the part they had played in bringing in a balanced budget.

(1)       Mr Chard introduced the first exception report for 2008-09, which identified a number of significant pressures that will need to be managed during the year if the Council was to achieve a balanced revenue position by the year end.  It was noted that, as this was the first exception report of the new financial year, it was usual to report a projected overspend but this was before any management action had been agreed.  He reassured the Cabinet, however, that the Council’s revenue budget had underspent in each of the last eight years and he was confident that the current year’s budget would also not overspend.

(2)       Mr Chard referred to the summary table of the forecast revenue pressures, excluding schools, shown in Table 1 on page 1 and 2 of the report.  He reported that the projected forecast variance was +£6.762m (excluding asylum) and +£11.762m (including asylum).

(3)       Mr Chard spoke briefly about the cost pressures being faced by the Council with regard to the current economic conditions and stated that a detailed paper was being prepared for consideration at an extraordinary Cabinet meeting on 4 August.  It was noted that the paper was likely to recommend sensible management of the additional costs over a three year period, rather than risking an impact on the quality of service delivery if these additional pressures were contained in a single financial year.

(4)       With regard to the position on the Capital Programme, Mr Chard assured the Cabinet that, in the current economic climate, the level of capital receipts due to be realised in the current financial year might not reach the projected level necessary to fund all of the planned projects in 2008/09 and that this situation was being monitored closely and options for dealing with a likely lower level capital receipts were being considered.

(5)       Finally, Mr Chard commended the recommendations to the Cabinet set out in paragraph 6.2 and 6.3 of the report.  He assured the Cabinet that the proposed virement and base adjustment within the Children, Families and Educational Achievement Portfolio would not have an adverse effect on the amount of money spent on grants.

(6)       Mr Carter stated that he was eager to see the proposed management action referred to by Mr Chard to enable the revenue budget to be brought back on target.  He added that, in the current economic conditions, the Council had an even greater duty to maintain sound financial management and to deliver the lowest possible Council Tax next year.  Mr Carter also stated that a number of meetings were currently being held within KCC to consider the impact of increased costs in a number of areas and an agreement would be reached on how to reshape the Council’s priorities accordingly.

(7)       Finally, Mr Carter stated that negotiations with the Home Office about the costs of dealing with the impact of asylum were proceeding well.  It was noted that, whilst Mr Carter could not give details at this stage, there appeared to be  ...  view the full minutes text for item 3