Agenda item

To consider the quarterly budget position.  

That the financial performance information for the first quarter of 2018/19 be NOTED.  

31.1           The report of the Head of Finance and Asset Management, circulated at Pages No. 13-21, provided the financial performance information for the first quarter of 2018/19 which Members were asked to consider.

31.2           The Head of Finance and Asset Management explained that the report highlighted a quarter one surplus of £81,867 on the revenue budget and detailed expenditure to date against both the capital programme and the approved reserves. The budget position in relation to the Heads of Service responsibility showed an underspend of £60,753 as at the end of June; this was due to savings in the two main headings of employees and income.  The employees heading showed a saving against the budget of £76,330; this was due to the way vacancies were managed during the recruitment period with limited use of agency staff and help from current staff to cover work. In addition, there was a vacant post in Democratic Services which was maintained to offset overtime and other pressures during elections; however, with no significant elections this year savings were being made against the post. In terms of deficits, there was an overspend shown against benefit claimant payments and quarter one monitoring had identified that the Housing Benefits Team had processed a higher than predicted level of overpayments over several years which was caused by claimants not informing the Council of changes in their circumstances. This reduced the amount of subsidy that the Council could claim from the government for operating the service to 40%. However, where it was also possible to reclaim from the individuals the Council was able to reclaim the full amount. In terms of income, the garden waste service had been a great success with a £70,289 surplus on the budget, mostly due to the service being above target following the implementation of the new sticker system and fixed renewal date. There was also some additional income showing in the Corporate Services budget which related to government grant income for the benefits team which had not been budgeted for; this was to help with any costs of transition of claimants to Universal Credit. Planning income remained under target which was cause for concern as it appeared to be a trend over the last 12 months; however, there had been some upturn this month so this would be monitored closely through the year. In respect of business rates, early indications from the pool were encouraging; however, it was to be borne in mind that the position could change quickly so Officers would be keeping a close eye on the situation.

31.3           The capital budget position was shown at Appendix 2 to the report and was currently showing a small underspend against the profiled budget. The underspend was due to the refurbishment of the Council Offices being slightly behind the budget profile; however, it should be noted that work was delayed, and costs had increased, due to issues such as the discovery of asbestos. This would put pressure on the overall budget as it moved to completion in quarter two although additional contributions from partners had been identified to offset the increase. Appendix 3 to the report provided a summary of the current usage of available reserves. Members were reminded that reserves had been set aside from previous years to fund known future costs and the strategic planning of the authority’s operation; the information in the appendix did not take account of reserves which had been committed but not yet paid. Whilst the quarter one position showed a significant balance, the expectation was that those balances would be spent in the future. Officers had been asked to update the finance team about their plans for reserves to ensure they were used for their intended purpose or released back to the general fund.

31.4           During the discussion which ensued, a Member questioned how the benefits overpayment position compared to previous years and what the expectations were of getting them back. In response, the Head of Finance and Asset Management explained that the Council had reported an excellent position last year so, whilst this year was worse than that, it was in line with previous years. It was very difficult to recover overpayments as they tended to be made to people with limited finances; however, extra resources had been put into this area with the intention of recovering as much as possible. The Head of Finance and Asset Management indicated that, realistically, he would expect around 50% to be recovered. In terms of the costs of chasing the overpayment, this depended on the length of time recovery took but Officers tried to get it back as quickly as possible. Another Member referred to the garden waste scheme and requested that the price of the service not be further increased. In response, the Head of Finance and Asset Management explained that this would be considered as part of the budget setting work; the garden waste service was doing well but there were other pressures which would need to be considered before any decisions could be made. A Member noted that the stickers used for the new garden waste scheme were being bleached by the sunshine and she questioned whether this was known to Officers. In response, the Deputy Chief Executive confirmed that Officers were already looking at how this could be addressed for future years.

31.5           In terms of the Council Offices refurbishment, a Member questioned whether the project was still within budget. In response, the Head of Finance and Asset Management confirmed that there had been a couple of difficulties regarding asbestos removal, in addition, the project team had taken advantage of the refurbishment to upgrade the intruder and fire alarms in the building; some of those costs would come from revenue and, as previously advised, some would be offset against partner contributions so the ‘net’ costs should be in line with expectations by the end of the project.

31.6           Having considered the report, and information provided, it was