Agenda item

To consider the level of spending against the Council’s Revenue and Capital budgets for the first eight months to 30^th November 2015.

Mr Thompson, Director of Resources, presented the Financial Performance Monitoring Report as at month 8.  The Committee was advised that the report set out the summary revenue budget position for the Council and its individual directorates for month 8, the period April 2015 – November 2015, together with an outlook for the remainder of the year. He explained that the report also included an assessment of progress to date against the Council’s latest capital programme, incorporated the Council’s balance sheet, it indicated the level of cash flow and contained information relating to income and debt collection.

Mr Thompson advised that there had been a deterioration in the overall financial position compared to month 5, when the Committee had last considered financial performance reports. However, he explained that the deterioration disguised a myriad of budgetary movements, with many directorates demonstrating an improved performance. Mr Thompson also reported that the figures for Month 9 did show some improvements and he considered that the position regarding the working balances should be much improved by the end of the financial year.

The Committee was advised that the largest overspend was in relation to Children’s Services, of which a significant factor was due to the placements of a high number of looked after children in the borough. It was reported that whilst the number of placements had stabilised between 440 and 460 for over 12 months, the increasing overspend was due to an increase in the cost of placements for children with complex needs.

Members were advised that an overspend of £300k on capital schemes was anticipated as a result of the additional holding time of the Syndicate building and the delays in demolition due to unforeseen obstacles. 

Mr Thompson provided Members with details of the Business Rates and Council Tax collection rates. Members were advised that the Council Tax collection rate was currently lower than it had been last year, but that the Business Rates collection rate had improved compared to the same point in 2014/2015. The Committee considered that it would be critical to ensure high Business Rates collection rates in light of potential future plans for local authorities to retain business rates in full.

Responding to questions from Members, Mr Thompson explained the implications in the event of the forecast position becoming the actual outturn, which would currently contravene the Financial Procedure Rules set out in the Constitution. He explained to Members that the very last resort would be for him to issue a s114 Notice to Full Council in order to suspend all contracts. He explained however, that the budgetary position would have to deteriorate substantially before that course of action was considered and reassured Members that the distance from contravening the Financial Procedure Rules was marginal at £220k and that, in the context of £40.6m of Earmarked Revenue Reserves and with four months of the financial year remaining, there should still be sufficient time to redress the position.

Members raised questions relating to the earmarked reserves, noting they had decreased since the Month 5 position. Mr Thompson advised that the reduction had been due to pension strains and redundancy costs. He advised that the earmarked reserves were being used for their intended purpose, to cushion the impact of costs over the medium term.

Upon questioning from Members relating to the offer of a long term, four year funding settlement from Government, Mr Thompson advised that he would consider a financially certain position preferable to the financially uncertain position that would be created in the event of not accepting the long term settlement.

The Committee also discussed a potential rise in Council Tax that was now being encouraged by the Government. Mr Thompson advised that a Council Tax increase alone would not provide such significant increase in revenue in order to substantially alleviate budgetary pressures. Members commented that should there be a Council Tax increase, there would be a strong requirement to demonstrate the services that were provided and how taxpayers’ money was being used.

Members raised questions relating to the £856k Private Finance Initiative Grant no longer being available and potentially being subject to Judicial Review with the risk being covered against the specific Waste PFI reserve. Mr Thompson explained that the advice was now to not go to Judicial Review and to revise plans with Lancashire County Council over the delivery of the service. Members were also reminded that it had been necessary to terminate the contract with the private sector firm as it had not been delivering upon the terms of the contract.

Members also noted that the report indicated a budgetary pressure of £96k in Leisure Services due to the early closure of the Gateway Gym. Mr Thompson advised that the cost of the closure to the gym could be considered as being more of an investment, as it had enabled the public sector to demonstrate to the private sector that a town centre gym was viable. He advised that the private sector had made a better offer than what the Gateway gym had been able to achieve and there would now be provision for a gym opening 24 hours a day that would help to increase footfall in the area.

Members also raised questions in relation to Concessionary Fares forecasting a pressure of £663k due to increased bus patronage, whilst considering that it was positive that public transport was being used. Mr Thompson advised that Blackpool had the highest take-up of concessionary fare Now cards across Lancashire and Cumbria. He noted that a number of local authorities were lobbying the Government in order to relax some of the requirements for concessionary fares that impacted heavily on local authority budgets.

Members questioned what the cumulative impact of budget cuts had been to Blackpool since 2011/2012. Mr Thompson advised that he did not currently have the figure available, but that it could be calculated and the Committee could subsequently be informed.

The Committee agreed to receive information on the calculated cumulative impact of budget cuts to Blackpool since 2011/2012 to be distributed amongst Members outside of the meeting.

Background papers: None