Agenda item

Context:

The purpose of this report is to provide Members with information on the forecast revenue outturn position of the Authority at the end of reporting period 4 which represents the financial outturn position for the 2015/16 financial year.

The report will also be considered by Select Committees as part of their responsibility to,

·         assess whether effective budget monitoring is taking place,

·         monitor the extent to which budgets are spent in accordance with agreed budget and policy framework,

·         challenge the reasonableness of projected over or underspends, and

·         monitor the achievement of predicted efficiency gains or progress in relation to savings proposals.

          Key Issues & Recommendations:

That Members consider a net revenue outturn underspend of £676,000, an improvement of £878,000 on quarter 3 outturn predictions.

Members consider a capital outturn spend of £18.3m against a revised budget of £18.8million, after proposed slippage of £43.7 million, resulting in a net underspend of £508k, of which circa £433k is available for recycling onto other projects/priorities which it is recommended will be held pending review of the additional pressures.

Consider and approve the £43.7m capital slippage recommended, paying attention to those schemes included in paragraph 3.5.4 where slippage has been requested by the service manager but is not being recommended to slip (£170k), and notes the significant level of slippage required at outturn not manifest earlier in the year highlighting a concern in managers capital forecasting going forward.

Considers the use of reserves proposed and notes the significant decline on earmarked reserve levels at end of 2015-16 and the likely indication at end of 2016-17.

Approves the reallocation of reserve balances, as per paragraph 3.9.5 following the actuarial review of the insurance reserve and review of other small reserve balances, in order to address reserve pressures and the apportionment of general underspend in supplementing reserve levels as follows:

 £1,037 million to Redundancy and Pensions reserve

 £419k to IT reserves

 £350k to Invest to Redesign reserve

Approves the use of the Invest to Redesign reserve during 2016-17 totalling £30,835 as MCC’s additional contribution to enable the work on the City Deal initiative to continue.

Member Scrutiny:

A Member thanked the Officer for the report and responding to her requests for information in a quick and efficient manner. As the Member had specific questions they wished to ask the Officer, the Member requested to speak to him, one to one at a later date.

The question of slippage was brought up and Members felt that better forward planning would be useful in future. The Officer responded that figures were artificially effected by the future school agenda at present.

A Member questioned the number of staff made redundant. The Officer answered that in 2015/16 the total number of staff made redundant was 102; 99 compulsorily redundancies and 3 other departure packages.

A Member asked if Officers were aware of the need to create savings throughout MCC. The Officer replied that moving to a percentage saving, from a mandate savings approach would make issues less obvious.

A Member asked what changes had been made with SEWTRA. The Head of Operations informed the Committee that the form of the agreement, previously a contact: commenced in April 2016. SEWTRA is being asked by Welsh Government to cut costs which effects MCC.

It was questioned why there had been extra costs at TIC for a double man facility. The Officer told the Committee that due to abuse from members of the public has resulted in it being unsafe for one member of staff to be at the site alone.

A questioned was raised regarding the mandates and it was commented that some of the figures seemed unreal with no plan and stressed how it was to set realistic, time-bound targets.

Concerns were raised regarding toilets and asked that the Senior Officer report back to the Committee at a future meeting.

A Member asked if the Monmouth Comprehensive School project was going to plan. We were answered that the tender prices received in January we were approximately £5m more than the funding envelope that the Council and Welsh Government are collectively funding. We are currently looking at revisions to the scheme. At present the Caldicot scheme is going ahead as originally tendered, that has necessitated some money moving from the Monmouth scheme to the Caldicot School scheme.

The Chair asked if the new lease had been signed for the cattle market in Raglan. The Head of Operations answered that we had not taken practical completion of the site as yet, so the maintenance and the preparation, partially of the dirty water system is still under development it was asked how much revenue & rent, rates MCC have received to date. The Assistant Head of Finance replied that we had received a six figure cheque from the Auctioneers which was returned to them because they would use this to influence the strategy of how much rent they pay going forward. The Officer requested to stop discussion on this subject as the confirmation of rent was a sensitive commercial negation. The Chair said that he would send a letter to the Chair of the E&D Select Committee to scrutinise this project.

A Member queried MCC’s position with Wormtec. The Officer answered she was unable to confirm figures as the information was commercially sensitive. MCC was a bad debtor and under the 2014/15 the debt was written off. It was noted that Welsh Government paid for the untreated food waste when Wormtec operations ceased and that there was no cost to MCC. It was clarified that liability for the land lies with the Ministry of Defence (MOD) and Natural Resource Wales (NRW) and confirmed that MCC has no financial or contractual liability.