Decision Maker: Council
Decision status: For Determination
Is Key decision?: No
Is subject to call in?: No
It is expected that Members note the projected
year end position based on performance to the end of Quarter 3
2019/20 and officers planned actions to ensure a balanced budget by
the end of the financial year.
The Finance and Resources Portfolio Holder, Councillor Andrew Jarvis, presented the third quarter financial monitoring report of 2019/20. The report provided the projected year end position based on performance to the end of Quarter 3 and officers’ planned actions to ensure a balanced budget by the end of the financial year.
As a result of the new leadership structure from April 2019, the Finance Team had split and re-allocated the budgets approved in February 2019 to the new Operational Leads and Lead Specialists. This was a moving situation, and the budgets reflected the current position of services, which had changed from Quarter 1.
The report and appendices included details relating to the revenue budget, capital expenditure, collection of Council Tax and business rates and the Council’s current position with regard to debt collection.
Appendix 1 set out the revenue variances to date. The approved net revenue budget for 2019/20 set by Council in February 2019 had been £14m, which had included a Customer Connect savings target of £740,000 and a vacancy factor savings target of £593,000. Additionally, carry forward requests of £510,000 had been approved by Cabinet on 24 April 2019. Expenditure budgets had been increased in accordance with those approved carry forwards along with the matching funding from reserves. Overall, at the end of Quarter 3, budget monitoring had identified a forecast year-end underspend of £15,000. Trends identified in these budget monitoring results had been fed into the 2020/21 budget setting process.
Appendix 2 set out the position on the Capital Programme. The capital budget for 2019/20 approved by Council in November 2019 had been £6.988m. Table 4 in the report summarised requests to update the Capital Programme totalling £140,500 as a result of additional external funding for several schemes. Expenditure against the Programme to the end of Quarter 3 had been £3.206m.
Appendix 3 provided an update on Treasury Management for the quarter. Investments had performed better than the relevant benchmarks. No repayment of existing borrowing or new borrowing was anticipated up to the end of the financial year.
As part of Phase 1 of the Customer Connect Programme, there were a number of transition costs resulting in a projected overspend in service budgets. Following appointments to Phase 2, the redundancy cost budget had been underspent, and it had been agreed with the Customer Connect Board and the Finance and Resources Portfolio Holder to use £213,540 (as identified in Period 7 monitoring) of this to cover the Phase 1 transition costs. Whilst still being used to cover staff costs related to Customer Connect, due to the use not being exactly as initially indicated, it was felt appropriate, for transparency and completeness, to also seek approval from Council, as the amount was over the £100,000 limit identified in the Financial Procedure Rules. Cabinet, at its meeting on 5 February 2020, had given consideration to the report and had recommended that Council confirm agreement in this regard.
Councillor Jarvis, in closing, said that the report highlighted that this Council was financially well-managed, running a balanced budget whilst continuing to deliver services and invest in improvements to the way it carried out business. He thanked the Finance Lead Specialist (Section 151 Officer) and the Finance Specialist for their work in producing the report.
Councillor Giles Archibald, Leader and Promoting South Lakeland Portfolio Holder, added words of appreciation to the Finance Lead Specialist (Section 151 Officer) and her Team, as well as past Portfolio Holders, and asked the Chief Executive to pass on thanks to all officers involved. Councillor Archibald said that it was remarkable in this age of austerity that the Council had been able to present such sound financial statements and he felt that all Members should be proud of what was being delivered. He expressed further thanks to all Members and to Councillor Jarvis for his presentation.
Concern having been raised, Councillor Jarvis explained that the contract for management of the Braithwaite Fold Caravan Park had expired, however, that nobody had been prepared to submit a tender on the existing basis. It had, therefore, subsequently been necessary to seek tenders on a different basis and an announcement was due to be made in the coming days. The Legal, Governance and Democracy Lead Specialist (Monitoring Officer) clarified that the site was, as a matter of course, closed during January and February in each year. In response to concerns as to the shortfall of income on the caravan park and to the potential for loss of custom with people turning to different sites, Councillor Jarvis explained that the site provided a significant source of income to the Council. It was, therefore, critical to agree an appropriate contract for management of the site in the long-term. He also pointed out that a commitment had been made to anyone seeking to use the site for contact to be made with them as soon as the site was re-opened.
Councillor Jarvis undertook to provide written responses in relation to queries raised regarding the £50,000 underspend on the Local Plans budget, the £43,000 overspend on car parks and in particular the £14,000 overspend on rates bills in this regard, and the £20,000 underspend on fuel in Waste Collection and Kerbside Recycling.
In response to a query about the £190,000 saving arising from the re-tendering of the insurance contract, Councillor Jarvis confirmed that the Council had like for like cover on all business operations. With regard to the projected shortfall of £106,000 on sale of recyclates due to current market prices of materials, Councillor Jarvis informed Members that this was an extremely volatile area. Councillor Jarvis responded to concerns regarding the use of agency staff, explaining that this had been necessary during implementation of the Customer Connect Programme and that without those people, the Council’s work would not have been done. He further drew Members’ attention to the fact that overall expenditure on staff had been below budget.
The Finance Lead Specialist (Section 151 Officer) was able to provide clarification with regard to the query on the £43,000 overspend on car parks and in particular the £14,000 overspend on rates bills in this regard. The increase in the rates bills was due to the re-valuation of the South Lakeland House Multi-Storey Car following a national rate ruling. In addition, she was pleased to inform Members that the Council’s insurance cover was, in fact, better than like for like, as cover had increased in some areas.
It was, subsequently, unanimously
RESOLVED – That
(1) the contents of the report and Appendices 1 to 3 thereto be noted; and
(2) agreement of the Phase 1 transition cost virement of £213,540 as identified in paragraph 3.4 of the report be confirmed.
Report author: Claire Read
Publication date: 11/03/2020
Date of decision: 25/02/2020
Decided at meeting: 25/02/2020 - Council