Agenda item

A report from the Interim Executive Director of Resources and Regulation is attached.

Steve Kenyon, the Interim Executive Director of Resources and Regulation presented a report updating the Committee on the authority’s financial position in line with the Committee’s Statement of Purpose to ‘Provide independent scrutiny of the authority’s financial and non financial performance to the extent that it affects the authority’s exposure to risk and weakens the control environment’.

It was reported that that the authority is projecting an overspend of £4.921m for the year, based on spending and income information as at 30 September 2016.

It was explained that the Authority’s financial position is continually monitored throughout the year, monthly reports are considered by service management teams and summaries available to Cabinet Members. A monthly summary is submitted to the Senior Leadership Team and to the Cabinet Member for Finance and Human Resources.

Quarterly detailed monitoring reports are considered by the Senior Leadership Team, the Cabinet, Star Chambers and the Overview and Scrutiny Committee. These set out a risk assessed summary of the financial position, explanations of major variances from budget, an assessment of the minimum level of balances, information on the forecast balances position and an assessment of performance against the objectives of the Financial Strategy.

It was explained that the projected overspend of £4.921m represents approximately 3.92% of the total net budget of £125.535m, and compares to an overspend of £6.395m at quarter 1.

An overview of the reasons for the variance was outlined in the report.

It was reported that due to the extremely difficult financial situation facing the Council in 2016/2017 the Senior Leadership Team had agreed and drawn up an action plan with some immediate additional spending controls over and above the usual controls:-

·         Recruitment freeze on staff and new agency placements (exceptions to be signed off by SLT);

·         Release of all existing casual/agency staff (exceptions to be signed off by SLT);

·         Cease overtime/additional hours (exceptions to be signed off by SLT);

·         Enter into no new training commitments and review existing training (exceptions to be signed off by SLT);

·         Re-launch Work Life Balance options around reduced hours/purchase of leave;

·         Cease spend on discretionary budgets; stationery, office equipment etc;

·         Cease spend on IT/Communications (exceptions to be signed off by SLT);

·         Any spend greater than £250 to be signed off by Executive Director;

·         Any new contractual commitments greater than £5000 (lifetime value of contract) to be signed off by SLT;

·         Consider “in year” budget options – e.g. previously unidentified efficiencies, review of non key services.

These controls had been in place since 9 August and compliance was being monitored.

In addition Executive Directors have been tasked with preparing turnaround plans as a matter of urgency for their departments to ensure that levels of expenditure are controlled and sustainable going forward.

Work was being carried out in relation to procurement activity and the possibility of renegotiating contracts including ones that weren’t as yet up for renewal.

The month 6 report had been produced and showed the most recent figures. It was explained that the figures showed a “snapshot” of the Council’s Balance Sheet at a given point in time.

Those present were given the opportunity to ask questions and make comments and the following points were raised:-

·         Councillor Silbiger referred to the projected overspend at month 6 representing 3.92% of the total net budget and asked whether this was in line with previous years. Additionally, the actual spend was only 37.8%of total projection at month 6 and would this therefore not result in an underspend if projected on a straight line basis.

It was explained that different times of year brought different costs such as winter maintenance during the winter months and parks and countryside maintenance in the summer. The figures were compared to figures at the same time period last year and were in line with last years’ expenditure.

·         Councillor Whitby asked which income streams within R & R were not performing as well as it had been hoped.

It was reported that car parking and leasing of commercial property were the main areas that were underperforming.

·         Councillor Walker referred to the dates of the Audit Committee Meetings and asked whether they should be changed to allow for more timely reports.

It was explained that the timetable of meetings was currently being produced and the dates of the 2017/2018 Audit Committee Meetings had been aligned with Overview and Scrutiny and the Cabinet Meetings and also to allow for the fact that the accounts will have to be produced earlier and audited by the external auditors more quickly than was previously required.