Agenda item

Finance Monitoring Quarter 3 Report

Minutes:

The Executive Director, Finance and Resources presented the report which gave the Council’s financial position for Revenue and Capital for the period April 2018 to December 2018. A number of areas were highlighted, including:

· A positive variance of £157K was projected.

· Details of the variances were broken down into the Council’s Strategic Purposes.

· The projected shortfall in planning applications and the impact this had on other areas, New Homes Bonus, Council Tax and the cost of Mott MacDonald.

· Help me live my life independently - Additional income received within the Lifeline service due to the contract with Cannock Chase District Council was a major contribution to the savings.

· The majority of savings in respect of the Provide Good things for me to see, do and visit related to Leisure and Cultural services.

· Enabling – there was a projected underspend which related to Customer Services centre due to a one off business rate refund and salary vacancies.

· Corporate Financing – two main factors related to this, including the discount for the advanced payment of Pension Contributions and a small budget saving relating to borrowing costs.

The Executive Director, Finance and Resources drew Members attention to the Capital budgets and an underspend of £2.243m. Again, she went through the variances in line with the Council’s strategic purposes and in particular the vehicle replacement budget, as there was delays on the vehicle replacement programme. The Head of Environmental Services ensured that the vehicles were at the end of their life before replacing and therefore may last longer than originally anticipated.

A number of items were also highlighted which related to the Capital budget Help me live my life independently, in particular Energy Efficiency installations and discretionary home repairs assistance which was due to a lack of applications received.

Explanation as to the reason for the virements within the recommendations were given and these related to the Disabled Facilities Grant and the combined Footpath and Cycle network project, which was part of a wider Worcestershire County Council scheme.

The Executive Director, Finance and Resources went on to provide Members with the details in respect of the increase in Capital budget for the Dolphin Centre. Members were reminded that the sports hall had been closed due to a number of health, safety and security issues. In addition approval had been given in July 2018 to continue with the demolition of the site following Members consideration of alternative hall provision through BAM. Following the decision to demolish the site MACE formally tendered for the woks, including demolition and the associated car park works.

In total seven contractors provided a submission for the works and the successful tender in terms of price and quality was at a value of £1.050m. This was £346k more than the current budget allocation of £734k which was based on previously estimated costs. The increase could be put down to a number of reasons including, disaggregation of the contract following the delay in the project, additional scaffolding and duration of demolition period following further surveys, building works inflation and securing building contracts during a time of significant redevelopment across the country. It was proposed that £346k be released from balances

Members’ attention was also drawn to Reserves Statement and the impact of the timing of the Small Business Rates Relief Grant that would offset the loss on business rates collection and appeals in 2019/20.

The Portfolio Holder for Finance thanked the Executive Director, Financial and Resources and the Financial Services Manager for their hard work and reiterated the concerns that had been raised in respect of the impact of the reduction in income from planning applications and the importance of resolving the current problems.

Following presentation of the report Members discussed a number of areas, including whether the underspend/surplus could be used towards the additional funding for the demolition of the sports hall, rather than using balances and capital receipts. The Executive Director, Finance and Resources agreed that any underspend would be transferred to balances and this would protect the balances position in the future. Members further discussed the situation in respect of planning applications and that the Council needed to come to a decision at some point as to whether it was confident enough in the work of Worcestershire County Council to no longer need the services of Mott MacDonald. The Leader advised that whilst progress had been made he did not feel that the Council had, as yet reached to such a position.

RESOLVED:

a) that Cabinet note the current financial position in relation to revenue and capital budgets for the period April – December 2018/19 as detailed in the report; and

b) that the virement of £23k in 2018/19 from Economic Development to the Bromsgrove Centres Management budget required to meet the Shared service agreement with NWEDR be approved.

RECOMMENDED:

a) that the virement of £120k in 2018/19 for replacement parking machines currently held within the vehicle replacement programme budget be approved. This is to ensure clarity of the current spend under these project headings;

b) that an increase in the 2018/19 Capital Budget of £102k for the Disabled Facilities Grant budge be approved. This is due to additional grant funding being received following the budget announcement in December 2018;

c) that an increase in the 2018/19 Capital Budget of £390k for a Bromsgrove combined Footpath and Cycle Way Network funded from a grant from Worcestershire County Council be approved; and

d) that an increase in the 2019/20 Capital Budget of £346k for the demolition of the Dolphin Centre to be funded from Capital Receipts (£202k) and balances (£144k) following receipt of tender quotations be approved.

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