Agenda item

(a)       That the Month 7 Revenue Budget Monitoring Report be received; and

(b)       That no formal recommendations be made to the Cabinet on this occasion.

The Finance Manager – Corporate Accounting and Systems introduced a report to provide Members with the Revenue Budget Monitoring 2015/16 (Month 7) for the Council Fund and Housing Revenue Account (HRA) which was to be submitted to Cabinet on 19^th January 2016. 

                        The figures were based on actual income and expenditure as at Month 7, and projected forward to year-end.  For the Council Fund, the projected net in-year expenditure was forecast to be £0.387m lower than budget which was a positive movement of £0.678m from Month 6.  Appendix 1 detailed the movements from Month 6 with the main change being an improved position on the Central Loans & Investment Account (CLIA) of £0.596m.  The Programme of Efficiencies was reported in paragraphs 1.05 and 1.07 and it was currently projected that £10.642m (83%) would be achieved; appendix 3 provided details on the latest variation to the level of efficiency achievable compared to the budget.  Details of costs for inflation and non-standard inflation were reported along with information on unearmarked reserves which showed that taking into account previous allocations and the current underspend at Month 7, the Contingency Reserve at 31^st March 2016 was projected to be £4.923m.  It was being recommended to Cabinet that two costs be funded from the Reserve.  The first was £0.800m to meet the estimated 20% increase of the levy required to meet past and future claim liabilities in relation to the former Municipal Mutual Insurance (MMI) company.  The second was a cost of £0.100m for the increased need for specialist social work capacity for child protection support working in partnership with statutory agencies.  The Chief Executive provided further detail on this area.  The Finance Manager – Corporate Accounting and Systems advised that if both of these uses of the contingency fund were approved by Cabinet, the remaining reserve would be approximately £4.00m.  Issues relating to the MMI, recycling, car parking, out of county placements, former Euticals site and in-year reductions in specific Government grants were all reported as risks for the Council.

                        Councillor Richard Jones referred to the transfer of the transport budget of £0.656m from Social Services to Streetscene & Transportation and queried whether this has had an impact on the overspend in Streetscene & Transportation.  The Chief Executive explained that the spend was originally held within Social Services portfolio but it was felt that it was more appropriate to hold it within the Streetscene & Transportation portfolio.  He added that it did not affect the over-spend in the portfolio.  Councillor Jones also referred to the movement of £0.376m between the Education & Youth and Central & Corporate Finance portfolios.  The Chief Executive explained that this move was to ensure that all borrowing was held in the CLIA account but added that it would not have an effect on the over or underspends for the respective portfolios.  In response to a question from Councillor Jones on whether match fund spend came from the relevant department or from Central & Corporate Finance, the Chief Executive confirmed that this could be from either.  The Finance Manager indicated that she would provide further information on match funding. 

                        In referring to the risk on the MMI, Councillor Andy Dunbobbin asked whether a timeline had been set for its completion.  The Chief Executive advised that he expected legal time limits to be in place for the submission of an insurance claim and added that he would speak to the Chief Officer (Governance) on the issue.  The Chairman queried whether any claims related to asbestos and the Finance Manager responded that the claims could be for a combination of issues. 

                        Councillor Robin Guest sought clarification on the figures for spend on education and whether these included any interest charges on capital finance.  He raised concern that this could result in a risk of lower figures being recorded for spend than were actually being made.  Councillor Shotton indicated that it was ensured that the overall education spend took account of relevant spend and referred to the 21^st Century Schools project.  The Chief Executive provided details of how the funding was accounted for and commented on the criteria for what was included or not.  He added that information on the spend for schools would be submitted to the Education and Youth Overview & Scrutiny meeting the following week. 

                        Councillor Haydn Bateman asked about the former Euticals site in Sandycroft and queried whether the Council expected to recoup all of its costs.  The Chief Executive advised that a specialist company had been employed to clear the site and remove the chemicals and once this had been completed, consideration would be given to disposing of the site.  The costs of the operation would not be recovered; Welsh Government had already co-funded the project costs.  

                        Councillor Richard Jones referred to the workforce efficiency proposals that were reported as being £0.300m for the original efficiency with the revised efficiency being £0.015m, resulting in an underachievement of £0.285m.  The Chief Executive explained that this was as a result of non-viable efficiency projects.   The Finance Manager indicated that this could include areas such as the delayed implementation of staff car parking but Councillor Guest indicated that this was included under Streetscene & Transportation as an underachievement of £0.070m.  It was agreed that clarification of this issue would be provided to the Committee prior to the Month 8 report.

The Chairman asked whether the parent company of the former Euticals site would be pursued for costs and whether there was insurance in place to cover such an event.  The Chief Executive advised that the clearing of the site had been the main priority to this point but issues around the site would continue to be pursued with the parent company.  Councillor Shotton commented on the uniqueness of the situation and added that it had been expected that other agencies involved would have been monitoring the site.  The Chief Executive spoke of other Control of Major Accident Hazard (COMAH) sites in the area and advised that if the situation reoccurred in the future, local authorities would still be expected to take responsibility for clearing the site and would therefore incur any costs associated with this.  The Chairman queried whether the Council had the ability to inspect the sites and the Chief Executive advised that if certain areas of a company’s maintenance plan was not complied with, then this could trigger actions such as inspections by the Health and Safety Executive.  Councillor Guest raised concern that the Council should be required to cover any costs if they did not have the responsibility to maintain or inspect the site and asked that this issue be clarified.  The Chairman referred to a concern that had been raised about another site and the Chief Executive agreed to discuss this with Councillor Carver following this meeting.  The Chairman felt that a contact point should be available for those with concerns to be able to seek advice. 

Councillor Richard Jones referred to the entry on the forward work programme for Emergency Planning Relief Work and suggested that this could include identification of a process to prevent a similar situation in the future, and suggested that obtaining a copy of the insurance documents for the sites would be beneficial.  The Chief Executive indicated that a role of the Emergency Planning Services was to ensure that COMAH sites had a competent risk assessment plan in place and added that this could form part of a presentation to a future meeting of the group.  Councillor Guest commented on corporate responsibility and whether it could be a requirement that appropriate insurance be in place for such sites to prevent the costs being transferred to other parties such as local authorities.  Councillor David Roney raised issues in relation to another site and the legal obligation to notify the local residents of testing that was to be undertaken; he understood that the notifications were not being issued.  The Chief Executive agreed to discuss the issue with Councillor Roney following the meeting.  Councillor Brian Lloyd indicated that he was on the Liaison Committee for Synthite in Mold, which met every three months, and he confirmed that notifications were included in the local press of when their testing and sounding of the alarm was to take place.     

RESOLVED:

(a)       That the Month 7 Revenue Budget Monitoring Report be received; and

(b)       That no formal recommendations be made to the Cabinet on this occasion.