Agenda item

Context:

To receive information on the forecast revenue outturn position of the Authority at the end of period 2 which represents month 6 financial information for the 2016/17 financial year.

Recommendations proposed to Cabinet:

·         That Cabinet notes the extent of forecast revenue overspend at period 2 of £839,000, an improvement of £529,000 on previous reported position at period 1.

·         That Cabinet expects Chief officers to continue to review the levels of over and underspends and reallocate budgets to reduce the extent of compensatory positions needing to be reported from month 6 onwards.

·         That Cabinet appreciates the extent of predicted schools reserve usage and an anticipation that a further four schools will be in a deficit position by the end of 2016-17.

·         That Cabinet approves a caveated use of reserves to finance £318,000 employment tribunal costs if the Council’s budget is not able to absorb the effect of this extraordinary expenditure over the remaining 6 months of financial year.

·         That Cabinet considers the capital monitoring, specific over and underspends, and importantly that Cabinet recognises the risk associated with having to rely on a use of capital receipts in the year of sale and the potential for this to have significant revenue pressures should receipts be delayed and temporary borrowing be required.

Member scrutiny:

·         In response to a Select Committee Member’s question regarding the potential increase in the number of Monmouthshire’s schools likely to be in a deficit budget at the end of the financial year (from six schools to ten schools), it was noted that the adverse variance is minor in nature.  Schools are being encouraged to have less balances to place less reliance on building up significant balances and reducing the volatility. The four schools that are likely to find themselves in a deficit balance at the end of the financial year will most likely be in deficit by less than £10,000.  Also, there is an overall trend where schools starting the year in a deficit budget is a reducing one and becoming an improving situation.

·         With regard to Chepstow School, it was noted that improvements have been made in respect of its deficit budget with the help of the Assistant Head of Finance.

·         In response to a Select Committee Member’s question regarding the Adults Services budget, it was noted that Monmouthshire has an increasing elderly population and expectations around care provision.  This was an issue that needed to be progressed. Elected Members are having to make hard choices year on year with all departmental budgets.  Officers across the Authority are therefore having to bring re-engineering plans with a view to having to do things differently.

·         Draft budget proposals will be available in December 2016.

·         In response to a Select Committee Member’s question regarding the Cattle Market in Raglan, it was noted that there is still some work to be undertaken before the Authority takes over the responsibility for it. It is still in the commissioning stage.