Agenda item

With reference to article 14 of the minute of its previous meeting of 28 September, 2010, the Committee had before it a report by the Head of Finance which advised on the projected outturn and financial position for the Council for the financial year 2010/11.

Appendix A to the report provided a financial statement which highlighted that the Council was managing a risk of £3.8 million in relation to the current outturn position varying from budget. Further to the decision taken at the meeting of Council of 2 November, 2010 (article 2 refers), the report explained that the additional costs associated with the payment of the increment from 1 April, 2010, were to be met this financial year. The 0.65% national pay award was also included within the projections, which was estimated to be a cost of £1 million across the Council.

The Social Care and Wellbeing Service were still reporting an underspend (of £2.3 million), due mostly to an under commitment of demand led budgets, which was offset in part by a reduction in grant income. It was noted that the demand and needs led nature of the Service posed a constant risk for cost pressures to arise.

Due to the previously reported problems regarding the homelessness situation and the impact on the Corporate Governance budget (due to the difference in housing benefit against subsidy received), it was felt that this strain should be shown against the Housing and Environment budget. There was also a pressure on the generation of £0.7 million of income from the repairs fund and Housing Revenue Account, which is based on the experience of last year’s budget, whereby there were reduced recoveries.

The Education, Culture and Sport Service reported that there was now a shortfall in the value of budget that was available to pay for the school catering service, and at present it was forecast to be a £1.5 million cost, mainly due to the full implementation of equal pay and modernisation. A corporate approach was being taken to mitigate this position. The Service was also experiencing problems due to teachers’ long term absence and the costs arising from the out of authority placement of children.

The report concluded that an estimate for an additional sum had been included to cover further capital financing costs in the current year, based on the fact that the funding available for capital expenditure is less than the full capital programme, and there were continuing risks that the necessary slippage could not be achieved.  

In response to questions from members, the Head of Asset Management and Operations advised that the Council was currently spending approximately £30,000 per day on salt and a further £10,000 per day on staff costs, throughout this extended period of adverse weather.

The Committee resolved:-

(i)         to note that should the projected outturn be reflected by the accounts at the end of the year, there would be a reduction in the General Fund balance of £0.2 million;

(ii)        to recognise that the budget had been set with the intention of increasing the General Fund balance by £3.6 million, and therefore that this would represent a movement against budget of £3.8 million;

(iii)       to note that uncommitted General Fund balances at year end would be £10.75 million, and therefore slightly below the recommended balance of £11.2 million that the Council had previously set, which is defined as between 2.5% and 3% of the net revenue budget; and

(iv)       to thank all members of staff involved in the extensive snow clearing that had taken place over the past two weeks.