Issue - meetings

(a)       That the report be noted; and

(b)       That the Head of Finance provide further information to Councillor Marion Bateman on additional superannuation costs. 

The Leader of the Council commented on the projected year end net underspend of £4.313m which was a considerable movement from the £2.334m underspend at Month 11.  He welcomed the budget approach which had been taken for 2013/14 and he recognised the financial challenges but he raised concern about the timing of how the underspend had been reported and how it had increased significantly in Month 12.  He and the other Cabinet Members had requested that action be taken to understand how the level of the underspend had occurred.  He said that it may be as a result of planned reductions or due to the receipt of grant funding and he also queried whether different decisions would have been made if the underspend had been noticed earlier.  The Leader commented on the need to protect frontline services for the future and explained that work would be ongoing on the Medium Term Financial Plan (MTFP).  He spoke of the challenges which faced the Council which included a currently projected funding gap of £8.5m for the financial year 2014/15 which increased to £28.5m for 2018/19.  The Leader also spoke of the need to make provision for the Single Status Agreement and that any policy decisions on the Schools Funding Formula would add to these figures.  He said that some of the challenges were unknown and he commented on the announcement by the Chancellor earlier in the year of the switch from revenue to capital funding for some areas at UK level and the implications it had for local government funding.  Other issues which were of concern included the challenges of homelessness, Welfare Reform and winter maintenance.  He hoped that the utilisation of the underspend would form a large element of the discussions and deliberations of the MTFP.       

The Head of Finance agreed with the comments made and said that a report on the MTFP would be submitted to the next meeting of Cabinet and to the 11 July 2013 meeting of this Committee.  She explained that 80% of Council’s funding was from the Government and therefore there was a significant impact if this was reduced.  The Month 12 Revenue Budget Monitoring Report had highlighted the need for tighter financial controls, forecasting and financial reporting and discussions on this were being undertaken with the Corporate Management Team to make positive improvements.   Work was being undertaken to look at the impact of the underspend in 2012/13 on the 2013/14 budget and what additional choice could be generated for 2013/14 onto the MTFP for 2014/15 and beyond. 

The Corporate Finance Manager introduced the report to provide Members with the detail of the Revenue Budget Monitoring 2012/13 (Month 12) information for the Council Fund and the Housing Revenue Account in 2012/13. 

For Council Fund there was a projected year end underspend of £4.313m, which was an increase of £1.979m on the £2.334m underspend reported at Month 11 and appendix 1 showed a summary of the movements from Month 11.  The table on page 60 showed the  ...  view the full minutes text for item 11