Agenda item

            (a)       That the Revenue Budget Monitoring Report (Month 12) be noted; and

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

The Corporate Finance Manager introduced a report to provide Members with the Revenue Budget Monitoring 2014/15 (Month 12) information for the Council Fund and Housing Revenue Account (HRA) which was being submitted to Cabinet on 16 June 2015. 

                        For the Council Fund, the projected net in-year expenditure was reported to be £2.059m lower than the budget and the movements from Month 10 were summarised in appendix 1.  The changes from Month 10 related mainly to adjustments for the single status rebalancing exercise, property maintenance reallocations and workforce efficiency accounting adjustments.  The overall variance between Month 10 and Month 12 was £0.343m and included an increase in workforce efficiencies with a positive variance of £0.546m; the details were shown in paragraph 3.12.  The second main change was the final estimated cost for the closure plan for the orphaned site at Sandycroft and the Council’s liability for the closure of the risk was £0.800m.  The analysis of Corporate and Functional efficiencies currently projected that £7.682m (87%) would be achieved resulting in a net underachievement of £1.158m.  Section 4 and appendix 6 detailed the carry forward requests which were all recommended for approval.  Included within the 2014/15 budget were provisions for non-standard inflation and allocations for this had been made to departments where there had been an evidenced need and had resulted in an underspend of £0.240m.  The Corporate Finance Manager advised that there was a reduced risk of significant changes occurring so previously reported risks had now been removed.  However, the final outturn would not be confirmed until the accounts had been finalised and submitted for audit.  Section 7 and appendix 4 provided details of the unearmarked reserves and indicated that the current projected level of the contingency reserve at 31 March 2015 was £5.000m.  

                        The HRA was projected to have an overall overspend of £0.069m and a projected closing balance at month 12 of £1.096m, which at 3.65% of total expenditure satisfied the prudent approach of ensuring a minimum level of 3%.    

                        Councillor Robin Guest felt that it had been regrettable that reductions in service provision had been undertaken when they may not have been required due to the amount of reserves available.  In response the Leader & Cabinet Member for Finance said that he had asked for further work on efficiencies for future years.  He commented on the importance of utilising the budget to benefit the Council due to reductions in funding that the Authority would face in the future.  One-off efficiencies could not support recurring efficiencies and the 2015-16 budget had been set on the basis of the recurring funds available to the Council.  The Corporate Finance Manager indicated that the reserves had accumulated over a number of years and the 2015/16 budget had been agreed based on the issues arising at that time which was at Month 7.  The Chief Executive explained that the contingency reserves were for in-year issues that could not be predicted.  The Council was in a positive position, which was not the case for a number of other Councils which had a negative figure.  He added that a reserve of £5m was a modest amount when compared to the overall annual budget of the Council. 

                        In response to a question from the Chair about whether the Italian owners of the former Euticals site in Sandycroft would be pursued to recover any of the costs incurred by the Council, the Chief Executive confirmed that all attempts would be made to recover the costs but he did not know if this would be successful.  He provided an explanation on the responsibility of the Council to make the abandoned site safe.  Councillor Guest indicated that the grant funding from Welsh Government of £0.700m and the £0.800m liability for the Council resulted in a £0.200m shortfall which he queried.  The Corporate Finance Manager advised that this figure had been included as costs in 2013/14.                             

RESOLVED:

            (a)       That the Revenue Budget Monitoring Report (Month 12) be noted; and

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