Decision Maker: Cabinet
Decision status: For Determination
Is Key decision?: No
Is subject to call in?: Yes
It is expected that members not 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.
It its also requested that Members approve the budget virement for as detailed in paragraph 3.4.
The Finance and Resources Portfolio Holder 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 an 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.
The Finance and Resources Portfolio Holder, in closing, thanked officer in the Finance Team for their work in producing the report.
Reference was made to paragraph 3.1.1 of the report and the fact that Phase 2 of the Customer Connect Programme was still being costed, with savings to be identified later in the financial year and being expected to meet the whole £740,000 target. The Finance and Resources Portfolio Holder explained that the Finance Lead Specialist (Section 151 Officer) was currently carrying out work in this area. Savings for Quarter 4 were broadly in line with expectations. In response to a query regarding variances and a projected shortfall of £106,000 on sale of recyclates due to current market prices of materials, the Finance and Resources Portfolio Holder informed Members that this was an extremely volatile area and advised that a more cautious estimate would be included in the following year.
RESOLVED – That
(1) the contents of the report and Appendices 1 to 3 thereto be noted; and
(2) Council be recommended to confirm agreement of the Phase 1 transition cost virement as identified in paragraph 3.4 to the report.
Reasons for Decision
Regular budget monitoring forms part of the corporate governance arrangements that support all Council priorities.
Alternative Options Considered and Rejected
There are no alternative options in relation to Appendices 1 to 3 to the report.
Report author: Claire Read
Publication date: 07/02/2020
Date of decision: 05/02/2020
Decided at meeting: 05/02/2020 - Cabinet
Effective from: 17/02/2020