Agenda item

To consider the level of spending against the Council’s Revenue and Capital budgets for the first four months to 31 July 2016.

The Committee considered the financial performance monitoring report, which set out the summary revenue budget position for the Council and its individual directorates for month 4, the period April 2016 – July 2016, together with an outlook for the remainder of the year. The report was complemented with an assessment of progress to date against the latest capital programme.

The report was presented by Mr Redmond, Chief Accountant. He outlined the headline situation, which was an overall overspend of £3.2m at month 4, compared with £2.6m at month 3. That was largely due to the increased number of looked after children and the associated costs, particularly in relation to external placements. As a result, the Children’s Services Department was forecast to be £3.1m overspent, although the national trend was showing a similar upward trajectory. Mr Redmond added that there had been a significant increase in anti-social behaviour in the town, which had contributed to the increased numbers and cost of residential places.

Mr Redmond went on to outline the overspend within Property Services of just under £500,000, which was based mainly on the current pace of property rationalisation and pressure from rental income within the Central Business District. He also referred to the overspend on Concessionary Fares, which was mainly due to the increased patronage of buses and the impact of fare increases. He also made reference to the favourable position within Treasury Management of just over £1m due to the ongoing temporary windfall from the short-term interest rates that were currently being paid to finance recent capital expenditure. Those savings were helping to offset the forecast overspend within Children’s Services.

Mr Redmond responded to a number of questions from the Committee. Referring to a section of the report which stated that within the remaining eight months of the financial year, there ought to be sufficient time to redress the current position, Mr Redmond was asked how that would be achieved in terms of working balances. He explained that the statement was a forecast but plans were in place with individual directorates to achieve the savings and the Director of Resources was involved in regular meetings to monitor those plans. Upon being asked about whether an overall strategy existed to bring about the required savings, Mr Redmond pointed to the Medium Term Financial Strategy, where the budget pressures were being reviewed.

Referring to individual service overspends, the Committee raised questions about Print Services, the Grundy Art Gallery and Governance and Partnerships. Asked whether Print Services were able to carry out any commercial activities, Mr Redmond confirmed that the service actively sought external work and income. The £63,000 forecast overspend by the Art Gallery was due to a loss of grant funding, which the service was now looking to replace via other means. Within Governance and Partnerships Services, the forecasted pressure of £34,000 within Legal Services was mainly due to an unachieved Priority Led Budgeting savings target and an income shortfall.

Responding to a question about how to reconcile increased demand for Council services against a reducing budget, Mr Redmond explained that as part of the budget process, a risk analysis would identify the pressures and a judgement would be made about savings targets. Upon questions being raised whether the £6m was a realistic target, Mr Redmond stated his belief that it was, although it might not be achievable due to the demands within Children’s Services.

The Committee made reference to the unidentified savings of £122,000 in the Visitor Economy within the Places Directorate and requested a more detailed explanation. Mr Redmond explained that the savings were as yet unidentified and were yet to be delivered. The matter would be picked up with the Directorate.

The Committee raised the issue of the £856,000 PFI grant within Community and Environmental Services being no longer available. Mr Redmond confirmed that was the amount which Blackpool had lost in PFI credits at the time when the waste disposal operating company ‘Global Renewables’  went into liquidation. The amount was being considered along with Lancashire County Council in the review of recycling plants with the risk being covered against the specific waste PFI reserve.

The Committee asked about the reason for the overspend of £42,000 within the Resources Directorate, which the report stated was due to staffing costs and income pressures. Mr Redmond confirmed that that was not due to agency costs and was as a result of the need to provide additional staff support for the reception areas at Municipal Buildings and Bickerstaffe House.

The Committee discussed the Council Tax Reduction Scheme and the deteriorating collection rate. Members agreed that it would be helpful if the actual costs could be illustrated within the report, as well as percentage figures. It was confirmed that the Revenues Department pursued arrears and non-payments, but also provided as much help and support as possible for people who were struggling to pay.

Mr Redmond was asked about the reduction in Business Rates collection, down from 35.7% last year to 33.8% as at month 4, 2016. He explained that was mainly due to a change in the phasing of payments and an extended period from 10 to 12 months which now applied. Going forward, he confirmed that the greatest risk to revenue collection was the appeals and back dated appeals processes.

Referring to the section of the report on the Summary Cash Flow Statement, and the interest charged by Lancashire County Council on the Local Government Reorganisation Debt, Mr Redmond was asked about the actual figure of the debt and he confirmed this to be approximately £19m.

The Committee agreed:

1.         To note the report.

2.         To request that in future, the actual costs involved within the Council Tax Reduction Scheme, in addition to percentage figures, were illustrated within the report.

Background papers: None.