Agenda item

To consider the level of spending against the Council’s Revenue and Capital budgets for the first 3 months to June 2014.

Mr Thompson presented the Financial Monitoring Report as at Month 3 advising Members that it had also been presented to the Executive at its meeting on 8^th September 2014.  The report presented a view of the current position in the Council’s Revenue and Capital budgets for the first quarter.  He reassured Members that although this was the first public report on financial monitoring, there had been internal monitoring of financial performance from the beginning of the financial year in order to maintain focus on priority areas.

Mr Thompson advised the Committee that the report reflected the new structure.  He reported on the main variances in the budget by Directorate and the reasons for the over and underspends.  Ongoing pressures in Childrens Services continued as a result of the number of Looked After Children and the reduction in the Education Services Grant funding as schools made the transition to Academies.  Adult Services also faced pressures due to the Deprivation of Liberty cases as did Community and Environmental Services due to Travel and Road Safety.  Mr Thompson also reported on further moderate pressures within Cemeteries and Crematoriums.  He advised that that the overspends would be offset by contributions from Area Forums, Contingencies and Reserves and Treasury Management resulting in a forecast overspend of £3.1m.

Mr Thompson reported that the level of Working Balances was at its lowest since 2005 without the financial growth to aid recovery that existed at that time.

The Committee was advised of the Earmarked Revenue Reserves for longer term commitments which allowed minimal scope for manoeuvre. In response to questions, Mr Thompson confirmed that there remained significant levels of capital spending which would need to be funded from internal resources. 

The decision not to proceed with the pay freeze following consultation had necessitated the recommendation to use Earmarked Reserves to maintain a balanced budget.  Mr Thompson reported that settlements had been reached for the majority of the first generation Equal Pay claims which would enable fund to be released from Earmarked Reserves to offset the in-year funding gap together with the balance being met from Contingencies.  This recommendation had been approved by Executive and Council. 

Mr Thompson reported on the significant risks related to Collection Rates.  He outlined the impact that the introduction of the Council Tax Reduction Scheme and the changes to the distribution of the Business Rates had had on income.  Mr Thompson stated that the Finance Report for Quarter 1 had reported that the Council was now responsible for 49% of successful business rate appeals. Mr Jack informed the Committee of concerns regarding the Council’s obligations in funding the historic appeals in light of the changes in how business rate income was distributed. Mr Thompson advised that a clearer picture on the impact of the appeals would be known by July 2015 as this was when it was expected that the majority of the appeals would be determined.

Mr Thompson continued his report by advising Members that no adverse variations on capital schemes had been predicted.  He concluded his report by advising Members on the remedial action that had been taken to bolster working balances and to meet the in-year budget gap.  Early indications for Month 4 were showing a slight improvement in the budget position.

The Committee agreed to note the report.

Background papers:  None