Agenda item

Quarter 2009/10 Integrated Finance & Performance Report

Minutes:

At the invitation of the Chairman, Councillor G. Denaro, Portfolio Holder for Resources advised that there was a significant overspend to the end of September together with a projected deficit to the end of the financial year. The main reasons for this were:

the impact of the downturn in the housing market on land charges and building control income targets;
significant increase in printing charges compared to those originally anticipated; and
a shortfall on the income from investments due to the rates of return being less than predicted.

The Head of Financial Services advised that a number of actions had been put in place to bring this back in line by the end of the year, including:

Transfer of an element of funds into a low risk but higher yield investment. Following discussions with treasury advisors it was understood that the Council could achieve 2.5% on limited investments with similar protection as presently in place.
A freeze on vacancies. The Council was currently holding a vacancy freeze in consideration of the future joint arrangements with both Redditch and the WETT programme. The freeze would ensure that business critical services were maintained whilst providing savings for the remainder of the financial year.
Review of non-essential expenditure. This would include the centralising of the office supplies and reviewing non-essential training.
A review of contracts in place which would identify where renegotiation could take place to reduce costs in the short term.

Members shared their concerns that a reduction in training was not a good idea as it played an essential part in the Council’s continued improvement. The Head of Financial Services assured Members that funds would be available for areas of essential spend to ensure services were delivered to the customer.

The Board was informed that the main areas of deficit were Planning and E-Government and that other areas were having to make savings to compensate for this. The significant increase in printing charges was discussed in detail and the Head of Financial Services advised that the supplier was being contacted with a view to reviewing this.

During the discussion it was noted that the Dolphin Centre fitness suite membership had exceed 750. Members discussed how this figure could be maintained and whether or not it was due to customers choosing it as a cheaper option to other gyms following the economic downturn and whether this figure could be sustained in future. The use of a loyalty card system was discussed as a way of tracking and targeting users.

Members raised concerns over the use of agency staff and the Head of Financial Services advised that this matter had been addressed. Members also shared their concern that the overspend had been taken into account in next year’s budget forecast and the Head of Financial Services confirmed that the appropriate action had been taken to address this. Concerns were also raised as to why the overspend had not been detected earlier and the Head of Financial Services explained that in future the predicted out turn would be part of the first quarter review as at June 2010.

Members asked to what extent Portfolio Holders were involved in the monitoring process and it was advised that they receive monthly monitoring reports and had monthly meetings with the relevant Head of Service. Members were asked to note that some departments are maintaining good progress and working within their budget.

The Assistant Chief Executive advised that the sickness level continued to improve.

RECOMMENDED that Portfolio Holders continue to work with Heads of Service to ensure overspend is managed and brought back in line with the budget.

RESOLVED:

(a) that it be noted that 62% of performance indicators are improving or stable;

(b) that it be noted that 58% of performance indicators had achieved their year to date target;

(d) that the particular successes and areas of potential concern as set out in the Council Summary be noted;

(e) that the current financial position on Revenue and Capital as detailed in the report and the proposed actions to mitigate the overspend on revenue be noted;

(f) that the release of previously approved earmarked reserves of £249k as set out in Appendix 5 be noted;

(g) that the budget virements listed in Appendix 6 are approved; and

(h) that Cabinet recommend to Full Council to reduce the Capital Programme 2009/10 by £1.148m as detailed in Appendix 7 to reflect the projects, due to the factors detailed in the report will note be delivered during 2009/10 and that these projects are recommended to be included in the 2010/11 Capital Programme be noted.

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