Agenda item

To review the financial situation for the directorate, identifying trends, risks and issues on the horizon with overspends/underspends).

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 period 3 which represents month 9 financial information for the 2016/17 financial year.

This 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.

Recommendations to Cabinet:

1. That Cabinet notes the extent of forecast revenue underspend using period 3 data of £79,000, an improvement of £919,000 on previous reported position at period 2.

2. 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 at quarterly cycles.

3. That Cabinet appreciates the extent of predicted schools reserve usage, its effect of forecast outturn reserve levels and the related anticipation that a further 6 schools will be in a deficit position by end of 2016-17.

4. 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.

5. That Cabinet approves an additional investment of £30,000 into the Disabled Facilities Grant capital budget in order to respond to demands being placed on the current programme, funded by a virement from existing Highways Maintenance and Access for All budgets.

6. That Cabinet approves a £30k increase to Woodstock Way linkage scheme afforded by an equivalent underspend to another area improvement scheme (Abergavenny).

Member Scrutiny:

Clarification was sought in regard to the underspend in Abergavenny which afforded funds to the Woodstock Way linkage scheme and the committee was told this related to work which was need to be done for the Eisteddfod which was never undertaken.

In regard to capital slippage it was asked why it would make the treasury position worse. In response we were told that if we do not get the capital receipts in that we use in part funding for our capital programme that will necessitate us having to borrow when we wouldn’t normally, those are additional costs effecting the appropriations account and treasury. These are capital receipts from sales of assets and land.

It was asked what analysis takes place along the build of the school and how closely is the spending on the school scrutinised. We were told in terms of project management there is a detailed budget and finance colleagues meet on a monthly basis.

It was asked, since there was no information on special schools what was the position on Mountain House School, the committee was told that the officer has agreed with CYP Select Committee that it would be helpful to their consideration of school balances if when a recovery plan is agreed they can understand what the three year requirement is.

It was noted that after May 2017 the CYP Select committee will receive a presentation on school balances

A question was raised regarding funding for a pool in Monmouth and in answer we were told that the original budget 21^st century schools and the agreement with Welsh government assumed affording a replacement pool so that is subsumed within the 21^st century school programme already. The Member then replied that the Leader of the council had categorically said that the pool will not come out of that funding and that the pool will be supplied with the leisure centre which will need an additional six million capital funding. The officer offered to provide a written response before the next committee meeting (ACTION M.H.).