Agenda item

That the report and the verbal updates be noted.   

The Corporate Finance Manager introduced a report to provide Members with the revenue budget monitoring 2013 (Month 3) for the Council Fund and Housing Revenue Account (HRA) which was being submitted to Cabinet on 17 September 2013. 

For the Council Fund, the projected net in-year expenditure was forecast to be £2.065m less than the budget, which was an increase of £1.065m on the £1m reported at Month 2.  This was reflected in the table at paragraph 3.01, which had been expanded to show the position at Head of Service level in line with accountability for the monitoring of budgets.  The main reason for the improvement of £1m in the forecast was due to an improved position within Social Services for Adults in Community Services as detailed in paragraph 3.04.  The significant in-year projected variances were detailed in appendices one to five together with the actions required to address each variance. 

A number of actions had been taken to strengthen financial control, budget management and financial reporting and these were detailed in paragraphs 4.02 to 4.09 of the report.  The Council’s Financial Procedure Rules had recently been updated and were agreed at Audit Committee and Constitution Committee in July 2013 and would be considered for approval by Council on 25 September 2013.  Financial Procedure Rule 3 (FPR3) in relation to Budget Management had been particularly strengthened in relation to accountability, forecasting and reporting and an extract was included at appendix 8.          

            Paragraph 5 detailed the amounts held centrally for pay inflation for the 1% pay award and for non standard price inflation in respect of Energy for Street Lighting, Energy, Fuel and Food Costs and it was currently assumed that the amounts included would be required in full. 

The risks and assumptions were identified in section 6.00 and the achievement of efficiencies were reported at section 7 where it was noted that at this early stage it was estimated that 95% of the efficiencies included in the budget would be achieved. 

Section 8 advised of the outcome of the piece of work undertaken on forecasting and trend analysis and included a recommendation that the budget for Social Services for Adults could be reduced by £1.670m and that a recurring efficiency of £1.435m be included in the MTFP. Further work was also being progressed in respect of Out of County Placements and Family Placement which would be reported in the Month 4 budget monitoring report.

The current position on unearmarked reserves was detailed in paragraphs 9.01 to 9.04 where it was reported that the Minister for Local Government & Government Business had decided not to exercise discretion to fund the Council’s claim for financial support under the Emergency Financial Assistance Scheme for costs incurred due to the severe weather in March 2013.  An allocation of £0.518m had been made from the contingency reserve to the appropriate Council Fund service accounts to finance the recovery costs expenditure. 

            The Corporate Finance Manager also advised of a projected overspend of £0.043m on the Housing Revenue Account (HRA); a nil variance had been reported at Month 2.  The projected HRA closing balance at Month 3 of £1.391m, at 4.9% of total expenditure, satisfied the prudent approach of ensuring a minimum level of 3%.  Appendix 7 detailed the reasons for significant variances occurring to date and the actions planned to deal with them. 

            The Leader of the Council provided a verbal update on the Leisure Services budget, explaining that an overspend of £0.827m was predicted at Month 3.  It had been expected that a Task and Finish Group from the Lifelong Learning Overview & Scrutiny Committee would look at the issue but it was decided that there was an urgent need to consider the shortfall in the Leisure Services budget and a report was therefore to be submitted to Cabinet on 17 September 2013.  The Alliance Leisure business plan had been agreed some time ago and had included a significantly high expectation of footfall which had not been achieved despite the upgrades at Deeside Leisure Centre and the Jade Jones Pavillion in Flint.  The Leader added that footfall had increased despite the current economic climate but not to the amounts proposed in the business plan.  It was felt that it was incumbent on the current Cabinet to take action and one of the first actions after the election in 2012/13 had been to make a one off payment of £0.361m to the budget for provision of loss of income for the duration of the closures of the leisure centres during the upgrades.  In the current year an additional £0.406m had been added to the leisure budget and the Leader had asked the Director of Lifelong Learning and Head of Finance to provide a report to the Cabinet meeting scheduled for 17 September 2013 on the work being undertaken to give realistic protection for Leisure Services.  This would include a recommendation to make a one off payment of £0.505m from the contingency reserves to reflect the actual income and expenditure going forward and that the capital financing charges will be transferred to the Central and Corporate budget and dealt with in line with other corporate repayments.  He said that it was recognised that other work needed to be undertaken but he felt that it was important to update Members and if the proposals were agreed, they would be reflected in the Month 4 budget monitoring report. 

            In response to a question from Councillor Paul Shotton about the strengthened FPRs referred to in paragraph 4.02, the Corporate Finance Manager said that the updated FPRs would help ensure robust processes were in place to give Members assurance in the financial control of the authority.  Councillor Ian Dunbar referred to paragraph 5.01 and asked about the deletion of spinal column point 4 from the national pay scale effective from 1 October 2013.  The Corporate Finance Manager explained that officers had been advised that as part of the pay award, spinal column point 4 had been removed and those employees on this point would move to spinal column point 5. 

            Councillor Marion Bateman raised concern about the lack of a fund for the renewal of the all weather pitch in her ward which had been a community facility for the residents; she hoped that this would be reconsidered in the future.  She also expressed her disappointment about Welsh Government declining the Council’s claim for support due to costs incurred during the severe weather earlier in the year.  Councillor Neville Phillips queried whether the Olympics had had a knock-on effect on the amount of footfall into leisure centres.  The Leader of the Council responded that in 2009/10 there were 1.239m visits to leisure centres and this had increased to 1.548m in 2012/13 but he did not know if this was as a result of the Olympics, however he felt that the increase should be welcomed in the current economic climate.  He added that the Alliance Leisure business plan had been overambitious on the amount of footfall expected at leisure centres. 

            In response to a query from Councillor Arnold Woolley about whether any Councils had met the criteria for payment of the Emergency Financial Assistance Scheme, the Corporate Finance Manager said that he understood that all submissions had been rejected.  Councillor Woolley also asked whether the Alliance Leisure business plan had been analysed to identify why and how the aims had not been achieved to ensure that any future business plans did not have the same problem.  The Leader of the Council responded that a great deal of work was ongoing and that it was important that lessons were learned. 

            Councillor Mike Peers asked:-

• whether the impacts on the budget detailed in paragraph 6.04 could be shown in £s;
• how the delay in the implementation of a revised staffing structure and the delay in the review of care packages had arisen;
• how the payment for the £0.250m for the budget pressure in Professional Support budget would be funded;  
• how the staff backfilling costs of £0.080m in Waste Disposal and Waste Collection had arisen.

In response, the Corporate Finance Manager said that:-

• the financial effect of the assumptions in paragraph 6.04 were not included in the figures at this stage;
• he would ask colleagues in Adult Services to provide a written explanation on the delay in the review of care packages;
• the £0.250m would be a netted off amount from the Adult Services budget;
• and on the staff backfilling costs, he said that one investigation had been completed but that three investigations were still ongoing.  It was hoped that they would concluded within six weeks and during the period of the investigations there had been a need to backfill the posts. 

            On the issue of the income projection into the Leisure Services budget, the Cabinet Member for Public Protection, Waste and Recycling said that he hoped to provide a fuller explanation at the appropriate committee.  He added that on the issue of the capital programme, it was appropriate for it to be funded from the revenue account of the authority.

            Councillor Alison Halford said that as Chair of Audit Committee she was aware of a great deal of finance staffing time had utilised for the investigations and queried whether there were costs for the Finance and Environment Departments as well as costs of pursing the complaints.  She felt that extra hours had been put in by the Audit Section for the investigation and she wanted to ensure that all of the costs were covered. 

            The Member Engagement Manager reminded the Committee that the meeting was taking place in open session and to bear this in mind when making their comments. 

            In response to the query from Councillor Halford, the Corporate Finance Manager said that a number of audit days were included in the budget but that some additional days may be required and he could provide further details at a later date.  The Head of ICT and Customer Services said that as authorised officer for the investigation, he felt that no further discussion should take place whilst the meeting was in open session as the investigations were still ongoing.  He added that a full review would be undertaken and that the findings would be reported in due course.  The Leader of the Council concurred that Members should be mindful of their comments about employees of the Council and raised concern about some of the comments made by Councillor Halford. 

            Following a question from Councillor Haydn Bateman, the Corporate Finance Manager confirmed that the £0.734m reported in paragraph 5.01 was sufficient to cover the 1% pay award.  Councillor Bateman also referred to the budget assumption on the former chemical plant in Sandycroft and asked about the intervention of the Council.  The Leader of the Council said that updates could be provided to Members if required and that the Council had a duty of care to protect the public but he was not aware that any other site was affected.  He added that discussions were ongoing with Welsh Government (WG) about solutions, roles and responsibilities.  Councillor Marion Bateman queried whether extra help had been brought in to assist with this issue as the day to day work of the pollution control team had not been undertaken.  The Leader responded that negotiations at a national level, through the Chief Executive, were ongoing and Natural Resources Wales had assisted with the costs.  The Cabinet Member for Public Protection, Waste & Recycling said that a significant amount of time and effort had been put in by the Public Protection team.  The land was crown estate and it was incumbent that the Council worked with WG on the issue of costs being undertaken now and in the future.  It was important that the area was safe for the residents of Flintshire and work had had to be undertaken with external consultants due to the nature of the work required.  He added that there was no suggestion that the issues on this site would affect the adjoining site. 

RESOLVED:

That the report and the verbal updates be noted.