Agenda item

            (a)       That the report is received and:

            (b)       That the printing format of the appendices be reviewed.

            (c)        That information about variances of over £25,000 should be reported. 

            (d)       That a net position of zero be removed from future reports.      

The Corporate Finance Manager introduced a report on the Revenue Budget Monitoring 2012/13 (Month 6) which was due to be considered by Cabinet on 18 December.   

                        The latest forecast projected an in-year overspend of £0.714 million on the Council Fund and a projected net under spend of £0.349 million on the Housing Revenue Account. 

                        For Council Fund there was an improvement on the month 5 position of £0.269m which mainly related to a reduced overspend of £0.078m within Corporate Services and an increased under spend of £0.191 m within Central and Corporate.  The reasons for all variances over month 5 were included in Appendix 1 of the report.

                        The Corporate Finance Manager highlighted the risks and assumptions in relation to the projection and also the non standard inflation held in respect of Energy for Street Lighting, Energy, Fuel and Food.  To date only the allocations for fuel of £0.196m and food for £0.133m had been allocated to service areas.  The allocations for energy continue to be held centrally although latest forecasts suggest that the allocations will be required in full.

                        The current projected level of contingency reserve at the end of March 2013 was an overdrawn amount of £0.083 million.

                        The Housing Revenue Account (HRA) latest projection was an under spend of £349,000 which would mean a closing balance at the end of the financial year of £1.419m, which at 5.2% of total expenditure satisfied the minimum level of 3%.

                        Councillor D. Mackie said that the way the appendices had been printed made them difficult to read.  The Head of Finance said that she would speak to Committee Services to see if this matter could be rectified.

                        Councillor R.G. Hampson asked whether the £349,000 under spend on the HRA could be used to increase spend on improving the council housing stock.  The Chief Executive confirmed that all efficiencies were reinvested in property repair and maintenance and that a number of targets e.g. bathroom replacement were being exceeded as a result. 

                        Councillor G. H. Bateman asked about the budget pressure of £25,000 that had been caused by the relocation of Leisure Services staff to Deeside Leisure Centre.  The Chief Executive said that this represented the office space left behind at County Hall, and the costs associated with loss of rental and ongoing utility costs as an accounting exercise for property costs. 

                        Councillor P. Shotton asked about the grant settlement for Flintshire from the Welsh Government and how the welfare reforms would affect this.  The Head of Finance said that there were budget pressures in 2012-13 which related to increased staffing in benefits section, costs of systems and that these would run into 2013-14.  A total of £8.8m of Council Tax Benefit support funding had been awarded to Flintshire, but the impact of the policy change had not yet been fully investigated.  The Chief Executive said that the public had to be consulted about the changes and that members would be made aware of the consultations.  He said that the £8.8m funding appeared to be adequate for current caseload, but would confirm this the following week.  The Head of Finance said that it had been suggested that persons previously in receipt of Council Tax Benefit would now be required to pay 10% of their bill.  This would be confirmed the following week.

                        Councillor R. G. Hampson said that persons on the basic state pension may have problems in finding the 10% council tax contribution in 2013/14.  The Head of Finance said that the Pensioner Grant Scheme would be available to persons on the lowest incomes and could potentially offer a rebate of up to £24 on the council tax bill.

Councillor C.S. Carver asked if the Lifelong Learning Overview and Scrutiny Committee could examine the budget pressure of £564,000 in Leisure Services.  The Chief Executive said that this was partly due to historic over spend and capital repayments to Alliance Leisure for improvement works.  He reported that the trading figures were actual and not projected income and that in some areas, income was up 25%.

The Chairman asked about the insurance risk highlighted on page 15 of the report.  The Corporate Finance Manager said that this was a risk that had only recently been notified to the Council and related to the triggering of a Scheme of Arrangement by the former Municipal Mutual Insurance Company (MMI). A trigger event occurred when the Directors gave written notice to the scheme that there was no reasonable prospect that MMI would avoid going into insolvent liquidation.  This then allowed a potential levy to be applied to the scheme creditors.  The Chief Executive said that members would be briefed once more details became available, and that the cost was likely to be a six figure sum.  The situation was not unique to Flintshire; many other Local Authorities were affected by MMI’s insolvency.

                        Councillor M. Bateman asked if Flintshire was vulnerable in the event of any new claims of abuse.  The Chief Executive said that all known abuse claims against the former Clwyd County Council had been processed and that there was no new evidence of further claims.  The Head of Finance explained MMI had got into financial difficulties as a result of several high level court cases which involved historic asbestos claims.  The Leader of the Council said that it was a financial risk, and that it would be helpful if the council could be made aware of whether the demand will arise in 2012-13 or 2013-14.  The Head of Finance said that it was possible that provision would need to be made in the current years’ accounts and that Flintshire would need to discuss with the other successor Local Authorities, the liability faced by Clwyd County Council so that the financial burden could be shared accordingly.

                        The Chairman asked why variances of over £25,000 in Community Services in re-ablement and locality teams had not been explained on the summary on page 19.  The Corporate Finance Manager agreed with the Chair and said that items over £25,000 should be reported.  He said that these two items would be reported back to committee.

                        The Chairman asked why a net position of zero for Central and Corporate was included on page 20 of the report.  The Corporate Finance Manager said that this should not have been on the report and that would not appear in future reports. 

                        The Chairman asked if more explanation be provided on page 38 of the report in relation to the £240,000 central budget movement and the Corporate Finance Manager responded to this.

The Chairman asked if the under spend in the HRA could stay within Housing.  The Leader of the Council said that it was planned to reallocate the money within housing and that further information would be available at the next Housing Overview and Scrutiny Committee.

                        The Chairman asked about the reduction in 2012-13 unsupported borrowing of £1.079 million for new school premises on page 58.  The Corporate Finance Manager said that he would provide further information at the next meeting.

Councillor M. Bateman asked if central government had allocated any additional funds to the Welsh Government for Capital Funding.  The Chief Executive said that £200+ million had been allocated to Wales and Welsh Government decisions were awaited on its use.  Councillor D. Mackie asked if there were any projects waiting for funding.  The Leader of the Council said that there was a big funding gap concerning capital projects, and any additional funding could be allocated quickly. 

Councillor C.A. Thomas asked if the Chancellor’s announcement would impact upon current school match funding arrangements and the modernisation plans for 3 areas.  The Chief Executive said that it was unlikely the 50-50 national-local funding agreement for 21^st Century schools would be changed as a result of the extra funding announcement.  It was agreed that capital, schools modernisation and section 106 money be referred to the Lifelong Learning Overview and Scrutiny Committee for consideration as a forward work plan item.

                        Councillor G. H. Bateman asked if the under spend on the Heating Programme would affect individual member’s wards in the light of the Sean O’Donnell letter. It was agreed that Housing Overview and Scrutiny look at this issue.

                        Councillor M. Bateman asked why route treatment and traffic calming projects had been delayed.  The Chief Executive said that he would provide information about the schemes.

            RESOLVED:

            (a)       That the report is received and:

            (b)       That the printing format of the appendices be reviewed.

            (c)        That information about variances of over £25,000 should be reported. 

            (d)       That a net position of zero be removed from future reports.