Agenda item

To consider a report by Councillor Julian Thompson-Hill, Lead Member for Finance and Assets (copy to follow) detailing the latest financial position and progress against the agreed budget strategy.

 

RESOLVED:- that Cabinet notes the progress against the agreed budget strategy.

 

Councillor J. Thompson Hill presented the report, circulated previously, which detailed the Council’s revenue budget and savings as agreed for 2012/13 as at the end of March 2013, and provided a summary update of the Capital Plan, Housing Revenue Account and Housing Capital Plan.

 

He explained that the latest revenue budget forecast had been presented as Appendix 1 and indicated an under spend across service and corporate budgets of £994k, £1.1m last month, which represented a variance of 0.86% across the total net budget. Approximately £849k had been committed to fund expenditure early in 2013/14 or had been proposed for use by services next year, with the available under spend being potentially only £111k.  The position for schools forecasts positive net movement on balances of £294k, £306k last month, on delegated budgets and £176k on non-delegated school budgets, £161k last month.  The movement on non-delegated budgets related to the number of CRB checks required during the year being fewer than planned.  The Housing Revenue Account summary had also been included in Appendix 1 for information, but this was not part of the Council’s main revenue budget.

 

The Council included a net saving target for the year of £3.443m in the 2012/13 budget and 99.3% of the savings had either been achieved or replaced amounting to £3.418m. The remaining £25k related to the printer rationalisation project which had been deferred to next year.  

 

The narrative supporting services forecasts in the last three finance reports had referred to several proposals to make contributions to reserves or to carry funding forward to 2013/14.  In many cases the timing of expenditure had been the issue.  The final outturn report to Council in June would formally approve transfers to or from reserves or balances, including carry-forwards.  Appendix 2 provided a summary of the items discussed in previous cabinet reports for information. 

 

Details of notable service variances had been included in the report and were summarised for Members, the key areas and issues included:-

 

Adult & Business Services - Outturn was currently break-even with any in year over-spend being funded from the Supporting People reserve.

 

Highways & Environment Services – Under spend had increased by £12k to £205k due a number of small increases in projected income levels.  The Highways and Infrastructure under spend had decreased by £116k to £58k with change details being included in the report.

 

The following responses were provided in reply to questions from the Leader:-

 

-               The increase in income levels had not resulted from an increase in charges but had been based on forecasts of income received.

-               As a result of the severe weather conditions experienced the Winter Maintenance budget would be utilised and this would be offset by the general maintenance budget.  Confirmation was provided that, in conjunction with neighbouring Authorities, a bid would be submitted for emergency funding.  Councillor D.I. Smith explained that all North Wales Authorities would be seeking financial support from Welsh Government to repair the damage caused to the road network by the severe weather conditions.  Councillor Smith agreed to convey the concerns expressed by Councillor Feeley regarding the standard of work undertaken by the jetpatcher.  The Chief Executive highlighted the importance of increasing the budget available for highway maintenance works. 

 

Councillor E.W. Williams referred to areas of the County, particularly rural areas, where the condition of the roads had deteriorated drastically as a result of the severe weather conditions.  He requested that the areas in question be noted and included in the highways forward work programme, and a copy of the programme be circulated to all Members.  Councillor D.I. Smith explained that the Section Manager: Network Management would be attending Member Area Group meetings and this would provide Members with the opportunity to convey their concerns and preferences with regard to  future projects.

 

Children & Family Services – The service forecast to under spend by £138k, £35k under last month, due to a £83k saving on the adoption fees budget.  The fostering recruitment campaign had been delayed and the £20k earmarked would be carried forward to 2013/14.

 

Housing & Community Development - Pressure reported related to funding of redundancy costs within Regeneration.

 

Communications, Marketing & Leisure – There had been an under spend of £27k, £1K last month, however £25k related to a rolled forward under spend from 2011/12 on the Communications & Marketing budget.  It was proposed that the £25k be earmarked to fund the review next year.  

 

ICT/Business Transformation – Last month’s under spend of £27k had included provision for possible costs associated with a software licence audit by IBM which initially indicated a potential increase to the Council’s licensing costs.  Costs would not increase as a result of the audit.

           

Customers & Education Support – There had been a decrease in under spend by £26k from last month to £232k due to the planned transfer of the £35k under spend on School Reorganisations to the Modernising Education Reserve to help fund future school reorganisation costs as highlighted in last month’s report.

 

School Improvement & Inclusion – Minor changes to the projected outturns for Special Education, Behaviour Support and recoupment had resulted in a decrease in the projected under spend from £142k to £126k.  The service proposal being for it to be used to contribute to the funding of the protection for schools affected by the recent changes to the funding formula.

 

Schools – The projection for school balances had been £2.114m, £2.125m last month which was a positive movement of £294k on the balances brought forward from 2011/12.  The Council continued to work with two schools in financial difficulty and both schools had been actively working to the targets set out in the plans.  Non-delegated school budgets had been forecast to be £176k under spent.  The total cost of the protection had been estimated to be £775k in 2013/14. 

 

            Corporate Budgets – These had been set assuming £1.7m was transferred to reserves as part of the funding strategy for the Corporate Plan.  It had been anticipated that budgets earmarked to generate cash in 2012/13 would generate more than the £1.7m target and £75k had been forecast.

 

            Expenditure to the end of March was £28.1m against an agreed Capital Plan of £31.1m.  Accruals for committed expenditure of £3m would mean the forecast expenditure would be achieved.  Appendix 3 detailed how the Capital Plan would be financed, and an update of the major projects within the Plan had been detailed in Appendix 4.  The capital financing budget forecast outturn had been amended from last month to assume a balanced budget.  The movement of £150k had created an opportunity to repay debt which had reduced the Council’s capital financing requirement.

 

            The Housing Revenue Account (HRA) forecast had been an in-year surplus of £72k, a £12k deficit reported last month, which compared to a budgeted surplus of £71k.  The movement had resulted from expenditure on management and maintenance being less than forecast and rent yields improving and the balance carried forward had been forecast at £943k. The Housing Capital Plan forecast had reduced slightly as planned expenditure would roll forward into 2013/14.  The Welsh Housing Quality Standard would be achieved by the end of 2013/14 and a recent review of the Housing Stock Business Plan confirmed it remained financially viable.  A summary of the Housing Revenue Account and Capital Plan had been included in the report.

 

The savings agreed for 2012/13 had been achieved or replaced, with one item deferred to next year.  The financial markets remain uncertain and continued to limit the number of institutions with which the Council could invest and the strategy of making short term investments would be likely to continue for the medium term.   At the end of March, total borrowing had been £133.27m at an average rate of 5.77% and total investments had been £11m at an average rate of 0.77%.

 

            During the ensuing discussion, it was:-

 

RESOLVED:- that Cabinet notes the progress against the agreed budget strategy.