Agenda item

Review of Financial Performance - Quarter 2: Revenue Monitor and Capital Investment Programme 2019/20

Minutes:

The Select Committee were provided with an update on the Council’s 2019/20 forecast revenue position and the financial position of the capital programme as at 30 September 2019 (Quarter 2), together with the revised capital programme 2019/23. 

 

The revenue position forecast was for a deficit variance of £1.625m, compared with £3.805m at Quarter 1, after allowing for approved and pending transfers to and from reserves.  The most significant areas of concern were People and Place, Children’s Services and Community Services and Adult Social Care and an overview on the major issues driving the projections were provided.  Action would continue to be taken for the remainder of the financial year to address variances and to take the mitigating action.  The overall position was to a limited extent being managed by offsetting some favourable variances. 

 

The financial position could be regarded as an early warning of the potential year end position if no corrective action was taken.  However, management were reviewing and challenging planned expenditure across all service areas and were looking to maximise income.  Further work needed to be done if the outturn was to be closer to a balanced position at year end.

 

Information on the Quarter 2 position for the Dedicated Schools Grant (DSG), Housing Revenue Account (HRA) and Collection Fund was outlined in the report.  While there were no significant issues of concern in relation to the HRA, the Collection Fund was forecasting an in-year deficit of £195k.  The DSG continued to be a financial challenge with a projected deficit increase in 2019/20.  Action was being taken with the aim of reducing the cumulative deficit and bringing the DSG towards a balanced position. 

 

The report also outlined the most up-to-date capital spending positions for 2019/23 for approved schemes, noting that the revised capital programme budget was £65.052m at the close of Quarter 2, a decrease from the original budget of £84.332m.  Actual expenditure to 30 September 2019 was £25.590m, or 39.34% of the forecast outturn.  It was probable that the forecast position would continue to change before the year end, with additional re-profiling into future years.

 

In response to comments of the Chair that the report appeared to suggest drift and a lack of control over budgets, it was noted that regular budget updates were provided to the respective Management Teams; that while issues in demand-led services such as Children’s and Adults’ Social Care were complex, activity including cost recovery groups addressing issues such as out of Borough placements, reviewing the local estate etc were in place; and the work undertaken by Finance Service staff in discussing options, progressing transformation plans etc with Services were advised.  With regard to budget pressures on adults’ and children’s social care and the impact on people, the investment being put into such services was noted, for example looking to manage people better and bring services and individual’s back into the Borough.

 

A Member noted increasing reliance on Business Rates and queried the implication of any government decision to increase the exemptions from Business Rates.  It was noted that the government 100% funded any exemption which was of benefit to the Council as it did not need to pursue payment.  Overall, the calculation of business rate income was dependent upon the number of business and rateable values meaning that this was a complex and volatile calculation.

 

RESOLVED that -

1.         the Revenue Budget Monitoring Report 2019/20 Quarter 2 – September 2019 and associated appendices be noted;

2.         the Capital Investment Programme Report 2019/20 Quarter 2 – September 2019 and associated appendices be noted.

 

Supporting documents: