Agenda item

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

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

Councillor Julian 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.

The report provided a summary of the Council’s revenue budget for 2013/14, Appendix 1.  The net budget had been £192m at the end of May and there had been a forecast under spend on service and corporate budgets of £45k (0.04%).  There had been a positive forecast on school budgets balances of £322k.  Non-delegated school budgets had been forecast to be under spent by £150k, the majority relating to the breakfast club initiative, and it had been proposed that it be used as a contribution to fund school formula protection and this had been included as a commitment.

Appendix 2 indicated the progress to date against the savings highlighted in the Medium Term Financial Plan for 2013/13.  A savings target of £3.061m had been agreed for the year and 39%, £1.186m, had been reported as achieved.  A summary of the Capital Plan and its aims, including the proposed expenditure of £6.8m, had been included as Appendix 3.  The 2013/14 budget specifically earmarked resources of £600k to be allocated to the Corporate Plan Reserve.  Appendix 4 provided an update of the major capital project within this year’s Capital Plan.  At the end of May, the Council’s borrowing totalled £133.264m at an average rate of 5.77%. Investment balances were £24.1m at an average rate of 0.86%. 

Details of the cost and effect on other services had been included in the report as follows:-

Highways & Environment Services – Although the Environment and Highways Services was currently showing a nil variance the following points should be noted:-

·                     The high value efficiencies currently in progress, These would be monitored closely and progress on achieving the efficiencies would be reported in future.   (PM & RW to Action)

·                     The number of school days in the 2013/14 financial year being higher than usual, which was likely to adversely impact on the school transport service area. The projected that any overspend in this area will be able to be maintained within the overall Highways and Environment budget.

Councillor Eryl Williams referred to the future estimated expenditure on capital schemes being nil, particular reference being made to transport in the County.  He referred to prudential borrowing, the receipt of Government grants and expressed concern regarding the clarity of the funding process.  Councillor Thompson-Hill explained that the figure in the report related to the last financial year and confirmed funding provision for 2013/14 would be reported in future reports.  The Chief Account made reference to Appendix 3 and provided details of the figures in relation the general Capital Plan.  He explained that only funding which had received confirmation of approval, through the Strategic Investment Group, had been reported.   

School Improvement and Inclusion – Detailed work had been on-going to provide a robust estimate for out of County placement costs and recoupment fees. These budgets had under spent in recent years.  However, they remained volatile as they were based on both pupil numbers and often complex negotiations between Authorities.  Councillor Eryl Williams expressed concern regarding the School Improvement and Inclusion funding structure, the implementation of the new arrangements and emphasised the importance of protecting the interests of the County. 

Adults & Business Services - The national requirement to protect social care budgets had resulted in additional funding within the year of £905k.  This would be used to fund a number of projects aimed at reducing revenue costs in the future.  In reply to a question from the Leader, the officers provided details pertaining to the national requirement to protect additional funding in respect of social care budgets.  It was confirmed that funding would be removed in the next financial year to invest in measures which would reduce long-term costs and provide preventative measures in the future.

Schools – The projection for school balances at the end of May had been £3.192m.  A positive movement of £322k on the balances brought forward from 2012/13.

The Housing Revenue Account (HRA) budget had been included within Appendix 1.  However, HRA resources were separate funds and could only be used in the provision of Council housing services.  The HRA budget for 2013/14 had been set assuming that capital expenditure of £890k was funded from revenue resources.  It was confirmed that Housing Subsidy payment was likely to reduce and the Housing Capital Plan forecast to spend £8.1m with the Welsh Housing Quality Standard being achieved by the end of 2013/14.  Housing Subsidy System reforms were thought likely to be implemented by April, 2014 and there were no further updates on progress at a national level to report.

Councillor Barbara Smith expressed concern regarding the reallocation of funding and suggestions that Welsh Government (WG) would be encouraging Local Authorities utilise their reserves on revenue expenditure.  The Chief Executive informed Members that the WG could not directly intervene in respect of this issue but made reference to the reduction in Local Government revenue provision.  The importance of building up reserves was highlighted by the Chief Executive, who explained that Denbighshire had plans for its contingencies, and he made reference to the Council’s ambitious Corporate Plan.

Following further discussion, it was

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

(PM & RW to Note)