Agenda item

Context:

To scrutinise the revenue and capital outturn positions based on activity data at month 7.

Recommendations proposed to Cabinet:

·         Members consider the forecast net revenue outturn overspend of £62,000.

·         That Cabinet requires Chief Officers to continue to work to reduce the £1.333m over spend on services, using measures such as a moratorium on non-essential spend and the freezing of vacant posts other than where recruitment is considered essential. 

·         Members consider the forecast capital outturn spend, the levels of capital slippage proposed and the levels of capital receipts to assist with capital programme funding, primarily the Future Schools Tranche A considerations.

·         Members note that the low level of earmarked reserves, which will severely reduce the flexibility the Council has in meeting the financial challenges of reducing settlements and consequent need to re-design services.

·         Members note the significant and continued forecast reduction in the overall school balance at the end of 2017/18 and supports the continuing work with schools to ensure that the Council’s Fairer Funding scheme requirements are met and that the overall schools balance reverts to a positive position at the earliest opportunity.

·         Members note the significant over spend on services and consider recurrent and new pressures that need to feature in the draft revenue budget proposals currently out for consultation.

Member Scrutiny:

·         The Enterprise Directorate overspend position, when adjusted for reserve movements, comes down to £279,000.

·         The Enterprise Directorate comprises of the following departments, namely: Business Growth and Enterprise, Planning Housing and Place Shaping, Tourism Leisure & Culture, Governance Democracy and Support and Public Protection.  Some of these departments have a specific aim around enterprise development and income generation but other departments do not share the same end point.  The Enterprise Directorate, in recent years, has been required to make significant efficiency savings and provide income generation.  The areas of pressure are mainly around some of the income generating services.

·         The events held last summer were meant to generate income and the major event put on did generate some income.  However, it was unfortunate that the smaller events put on to accompany the major event lost money.  The reason for the loss was due to unforeseen circumstances.  A comprehensive review of that function is being undertaken.  The results of this independent review will be available in due course and will be scrutinised by the Select Committee at a future meeting.

·         The £279,000 overspend will be balanced at year end. A recovery plan has been established to ensure the budget will be balanced.

·         In response to a Select Committee Member’s question regarding net Council fund surplus, it was noted that these figures were not cumulative.

·         A part of the benefit of having an Alternative Delivery Model will be the recruitment from outside of the Authority, the establishment of a Board that has the relevant experience and the commercial acumen.

·          Next year, the Authority has set itself a target of delivering a £500,000 saving in terms of procurement.  Currently, due diligence and options analysis are being undertaken, which shows exactly where and in what service areas the Authority needs to target efficiency savings in the future.

·         The review of the Authority’s procurement procedure is still in the early stages.  However, there are eight areas that require reviewing. Support from the Select Committee in taking this matter forward would be beneficial with a view to producing a procurement plan. When the plan is completed, it will be presented to the Select Committee for scrutiny.

·         Since the dispatch of this agenda, it was noted that due to the adverse weather conditions in December 2017, the Authority’s winter maintenance costs have increased.  This is being monitored with a view to addressing these additional costs.

·         In response to a question regarding Capital receipts in relation to the former County Hall Cwmbran, Coed Glas Abergavenny, the Magor buildings and the Morrison’s development Abergavenny, it was noted that a report regarding the Former County Hall site at Cwmbran will be presented to a future Select Committee meeting.  A brief summary regarding the former County Hall site and the Morrison’s development will also be circulated to the Select Committee.

·         The Outdoor Education Service has incurred a £41,000 loss, due to Torfaen County Borough Council and Blaenau Gwent County Borough Council withdrawing from the partnership.  However, the bottom line trading activity is unaffected as a substantial reserve has been built up around this service. It will require the activation of an Alternative Delivery Model (ADM) in order to resolve this issue.

·         In response to a question raised regarding the marketing of Hilston Park, it was noted that predominantly, the service in how it is constructed and paid for is tailored for schools providing an outdoor education experience.  The Authority is constrained how it can market this service to the private sector, as the service is occupied by schools Monday to Friday.  Hilston Park does generate sustainable sources of income but there is a recognition that, as an Authority, we could develop this site further.