Meeting documents

To consider the attached report.

Contact Officer:  Nuala Donnelly  (01296) 585164

The Committee received the report on the Council's financial performance for the period 1 April 2017 to 30 September 2017.  The current position at the half way point of the year was showing an overspend against budgets of £1.290m.  The latest Quarterly Finance Digest had been included as an appendix to the Committee report and Members referred to this document whilst considering the report.

The financial position was largely being driven by budgeted levels of staff costs in relation to the reorganisation of the Council.  Over the past 12 months, the Council has undertaken a series of business reviews in order to position itself as a more commercial organisation.  It was anticipated that the financial benefit of doing this would be realised through significant savings in staff costs in the future.

During the first 6 months of the year, £0.672m of salary savings had been made  as a result of business reviews and vacancies.  These vacant posts were, however, being filled by temporary staff (agency and consultants) at a premium cost.  For the first six months of the financial year, agency costs were reported as being £1.290m above budgeted levels.  It was anticipated that the reliance on temporary staff would reduce during the year as vacant posts were filled.

The forecast for the financial period to the end of March 2018 was now expected to be an overspend of £0.496m.  This overall figure included redundancy costs of £1.7m and temporary staff costs of £2.9m, offset by full year salary savings of £1.8m in excess of the salary savings requirement.

The cost of redundancies would be funded from reserves.  The use of reserves to meet redundancy costs had previously been agreed to fund these exceptional costs of reorganisation.  The council anticipated the pay back of costs incurred through staff savings over the next few years.

Detail of the reserves and provisions held by the Council were detailed on page 13 of the Digest.  After allowing for known movements, the balance of reserves was forecast to be £35.817m at 31 March 2018.

As well as the revenue budget the digest, on page 14, it had also been reported on the level of capital spend to 30 September 2017.  Whilst the year to date spend of £0.78m represented only 6% of the total anticipated spend, there was no perceived risk on the delivery of the schemes and it was anticipated that expenditure would increase in line with plans over the second half of the year.

Page 15 of the Digest detailed information on the level of investments and borrowings during the first six months of the financial year. No new borrowing has been taken out during the year and so the current level remains at £23.5m.  The council had £54.8m invested at the end of September, in a combination of banks, building societies and money market funds.

Budget holders’ were continually asked during the year to review all of their areas and to reforecast their budgets both positively and negatively in order to have as accurate a year end position as possible for the December Digest.

Members sought further information and were informed:-

(i)            that the current forecast overspend of £0.496m for the year as well as the redundancy costs of £1.7m would be paid from balances, leaving year end expected outturn for the General Fund Statement of Balances of £1.924m.

(ii)           on the current position regarding the use of consultants and agency staff, as had been explained during the budget planning agenda item.  Members were informed that a review of pay in the waste services area was being undertaken, to assess whether any changes could be made to reduce the high turnover of loaders and drivers.

(iii)          that, from an accountancy perspective, the difference between Revenue Reserves and provisions and balances was that reserves were held for a specific purpose in the future and usually related to a known risk, while balances were a contingency held against unexpected future events.  It was expected that some of the NHB Reserves would be moved this year to show against specific schemes.

(iv)         that the information on the Commercialisation and Business Transformation portfolio represented the half-yearly position.  Where expenditure for the first 6 months of the year was greater than the yearly commitment then the position would continue to be monitored, managed and reported in future digests.

(v)          that the Council would be recompensed for some costs relating to work undertaken in relation to HS2, e.g. employing additional planning staff.

(vi)         that a report would come to a future meeting looking at how the format of the Quarterly Finance Digest might be improved to assist Members in monitoring financial information.  This could include looking at relevant key performance indicators.

Members commented that they would like to see a greater level of detail provided with the financial digest reporting so that they were able to identify impacts within their individual Wards.  For example, the information on the Civic Amenities portfolio, Public Conveniences, did not specify which conveniences these related to.  Members who had particular concerns were informed that they could ask for feedback at any time by submitting questions on the Question Sheet at the back of the Quarterly Finance Digest or by contacting the Strategic Finance team. 

RESOLVED –

That the content of the Quarterly Finance Digest for the period April to September 2017, be noted.