To note the projected year end position based on performance to the end of Quarter 2 2019/20 and officers’ planned actions to ensure a balanced budget by the end of the financial year and to consider the updated Capital Programme and the updated Procurement Schedule 2019/20.
Councillor Andrew Jarvis, Finance and Resources Portfolio Holder, introduced the Corporate Financial Monitoring Update for Quarter 2 2019/20.
Appendix 1 to the report 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 2, budget monitoring had identified a forecast year-end overspend of £422,000; this included the saving target for Phase 2 of Customer Connect, which was to be identified later in the financial year and transition costs of implementing Phase 1 of Customer Connect. Since the initial Quarter 2 update report had been prepared for the Overview and Scrutiny Committee and Cabinet, the Phase 2 job offers had been made. As a result, the allocation for redundancy costs was capable of funding the transition costs associated with staff changes. This would reduce the forecasted year-end overspend to £218,000 before the savings target for Phase 2 and to £60,000 if Phase 2 savings were achieved, as was expected. At the same time in 2018/19, a total of £612,000 in overspends and outstanding savings target had been reported. The Council had then gone on to achieve an underspend of £9,000 at outturn. Excluding savings targets, the overspend in year was estimated to be £264,000 against an overspend of £251,000 in 2018/19. Trends identified in these budget monitoring results would be fed into the 2020/21 budget setting process.
Appendix 2 to the report set out the position on the Capital Programme. The capital budget for 2019/20 approved by Council in July 2019 had been £16.4m. Table 4 in the report summarised requests to update the Capital Programme, including the £325,000 purchase of land at Dowker Lane, Kendal, the re-profiling from 2018/19 of Ulverston Town Hall grant and various minor adjustments. Expenditure against the Programme to the end of Quarter 2 was £2.292m. Following the review of the Capital Programme with leads and portfolio holders, £10.6m of re-profiling had been identified and was included in the revised Capital Programme at Appendix 4 to the report for Council to approve.
Appendix 3 to the report 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.
Since April 2016, the Council’s Constitution had permitted officers to conduct and conclude the contracting processes without further approval, providing it was in line with the Procurement Schedule, to be approved by Council at least annually. Where a procurement process was over budget then approval would still be required in accordance with the Financial Procedure Rules. Where an officer sought approval for a waiver or exemption under the Contract Procedure Rules, this was also included in the Procurement Schedule. An updated Procurement Schedule for 2019/20 was attached at Appendix 5 to the report which included some additional procurement exercises not approved in July 2019.
A budget update was included in the report on the impact of the Government spending review on the Council’s budget for 2020/21 and the latest timetable for preparing and approving the budgets for 2020/21 – 2024/25 was included at Appendix 6. The original budget timetable had anticipated that the 2020/21 to 2024/25 draft budget would be reported to Cabinet on 27 November 2019. However, due to the calling of the General Election for 12 December 2019, the draft budget would be reported to the rescheduled meeting of Cabinet on 20 December 2019. All Council Members had been provided with a copy of the Cabinet report and a budget briefing session had been held prior to the Council meeting. The budget report to be considered by Cabinet on 20 December was based on the Government’s technical consultations on its proposals for a one-year local government funding settlement for 2020/21, broadly based on the 2019/20 funding.
Councillor Jarvis moved the recommendations contained within the report, also thanking all involved in the review of capital phasing. He was seconded by Councillor Robin Ashcroft, Economy, Culture and Leisure Portfolio Holder.
Note – At this stage in the proceeding, due to the fact that the planning applications were shortly to be considered by the Planning Committee and having regard to the risk of bias and pre-determination, those Members of the Planning Committee present declared a non-pecuniary interest in relation to the two items in the updated Capital Programme relating to re-profiling of the Grange Lido and South Lakeland House/Kendal Town Hall projects. Councillors Helen Chaffey, Brian Cooper, Philip Dixon, Judy Filmore, Gill Gardner, John Holmes, Vicky Hughes, Anne Hutton, Janette Jenkinson, Malcolm Lamb, Kevin Lancaster, Susanne Long, Pete McSweeney, Eric Morrell and David Webster, therefore, left the Chamber during the discussion and voting on approval of these two elements of the updated Capital Programme.
This being the case, Councillor Jarvis proposed, seconded by Councillor Jonathan Brook, Deputy Leader and Housing and Innovation Portfolio Holder, that two separate votes be taken on (a) the Capital Programme re-profiling in relation to the projects for Grange Lido and South Lakeland House/Kendal Town Hall; and (b) the remainder of the updated Capital Programme. A vote was subsequently taken in relation to (a) and was carried.
Note - Councillors Helen Chaffey, Brian Cooper, Philip Dixon, Judy Filmore, Gill Gardner, John Holmes, Vicky Hughes, Anne Hutton, Janette Jenkinson, Malcolm Lamb, Kevin Lancaster, Susanne Long, Pete McSweeney, Eric Morrell and David Webster returned to the Chamber.
Discussion continued in relation to the remainder of the item.
A query having been raised in relation to the Vehicle and Plant Replacement Programme, Councillor Jarvis explained that the Council was considering electric vehicles, however, that the refuse collection vehicle currently in production was not suitable for the area’s hilly terrain. The Council would be carrying out research into effective solutions for the area of South Lakeland. The option of using Bio LPG was raised and attention drawn to the potential for simple conversion and the likelihood, as a result, of an 80% reduction in carbon emissions.
A further query was raised in relation to the amount of shortfalls and in particular to the potential £52,000 shortfall on Lake encroachment rent income bearing in mind the fact that these fees were fixed. The Finance Lead Specialist (Section 151 Officer) explained that this was down to rent reviews which were currently being processed. She undertook to provide a full answer in writing.
A vote was then taken with regard to the remainder of the substantive motion, including (b) approval of the remainder of the updated Capital Programme and it was, subsequently
RESOLVED – That
(1) the contents of the report and Appendices 1 to 3 and 6 be noted; and
(2) the following be approved:-
(a) the updated Capital Programme at Appendix 4 to the report; and
(b) the updated Procurement Schedule at Appendix 5 to the report and delegation to officers.