Your Councillors


COMMUNITIES, HOUSING & ENVIRONMENT COMMITTEE

17 October 2017

Is the final decision on the recommendations in this report to be made at this meeting?

No

 

First Quarter Budget Monitoring 2017/18

 

Final Decision-Maker

Communities, Housing & Environment Committee

Lead Head of Service

Director of Finance and Business Improvement

Lead Officer and Report Author

Mark Green – Director of Finance and Business Improvement (Lead Officer)

Paul Holland - Senior Finance Manager Client Accountancy (Report Author)

Classification

Public

Wards affected

All

 

 

This report makes the following recommendations to this Committee:

That the revenue position at the end of the first quarter and the actions being taken or proposed to improve the position where significant variances have been identified be noted.

 

 

This report relates to the following corporate priorities:

The budget is a statement, in financial terms, of the priorities set out in the strategic plan. It reflects the Council’s decisions on the allocation of resources to all objectives of the strategic plan. The issues raised in this report identify areas where financial performance is at variance with priority outcomes.

 

 

Timetable

Meeting

Date

Policy & Resources Committee

20 September 2017

Communities, Housing and Environment Committee

17 October 2017



First Quarter Budget Monitoring 2017/18

 

 

1.        PURPOSE OF REPORT AND EXECUTIVE SUMMARY

 

1.1     This report provides the committee with an overview of the revenue budget and outturn for the first quarter of 2017/18, and highlights financial matters which may have a material impact on the Medium Term Financial Strategy or the Balance Sheet.

 

1.2     As at the 30 June 2017, this Committee was showing an overall negative variance of £300,000. The individual variances for each service area are detailed within Appendix I.

 

1.3     The position for the Council as a whole at the end of the first quarter shows a positive variance but there are still a number of underlying pressures across all the Committees that need to be addressed to ensure that this position continues throughout the year.

 

 

2.        INTRODUCTION AND BACKGROUND

 

2.1     The Director of Finance & Business Improvement is the Responsible Financial Officer, and has overall responsibility for budgetary control and financial management.  However in practice, day to day budgetary control is delegated to service managers, with assistance and advice from their director and the finance section.

 

2.2     The Medium Term Financial Strategy for 2017/18 onwards was agreed by full Council on 1 March 2017.  This report advises and updates the Committee on the current position with regards to revenue expenditure against the approved budgets.

 

2.3     Attached at Appendix I is a table detailing the current budget and

expenditure position for this Committee’s services in relation to the first

quarter of 2017/18, to June 2017. The appendix details the net budget per cost centre for this Committee. Actual expenditure is shown to the end of June 2017 and includes accruals for goods and services received but not yet paid for.

 

2.4     The columns of the table in the Appendix show the following detail:

 

a)   The cost centre description;

b)   The value of the total budget for the year;

c)   The amount of the budget expected to be spent by the end of June 2017;

d)   The actual spend to that date;

e)   The variance between expected and actual spend;

f)    The forecast spend to year end; and

g)   The expected significant variances at 31 March 2018.

 

2.5     Appendix I shows that of an annual budget of £8,002,360 there was an expectation that net expenditure of £1,842,368 would be achieved by the end of the first quarter. At this point in time the budget position for this committee as a whole is an under spend of £12,671, but the current forecast indicates that the outturn position for this committee will show an adverse variance of -£300,000 by the end of the year.                                                            

2.6     Explanations for variances within individual cost centres which exceed or are expected to exceed £30,000 are provided below in accordance with the council’s constitution:

 

Communities, Housing & Environment Committee

Positive

Variance

Q1

£000

Adverse

Variance

Q1

£000

Year end

Forecast

Variance

£000

Homeless Temporary Accommodation – An additional budget has been provided for temporary accommodation this year, but an overspend is still expected because (a) it has taken longer to bring into use Council owned properties for homeless families and (b) current trends indicate an increase in the numbers we will have to accommodate.

 

-50

-200

Pollution Control – General - The variance is as a result of an unspent £206,000 Defra Air Quality Grant. Any unspent grant at year end will be carried forward to the following financial year.

56

 

0

 

Recycling Collection - The variance is due to increased contract costs, resulting from a higher indexation increase than budgeted for. The Head of Service has plans to address this shortfall.

 

-35

0

Street Cleansing - The variance is a result of several reasons including unmet savings targets, increased refuse disposal costs and increased overtime and agency costs exacerbated by premium rates for shift work to cover staff sickness..

 

-61

-100

 

 

 

 

 

 

 

 

 

 

3.   AVAILABLE OPTIONS                                                                                   

 

3.1     In considering the current position on the revenue budget at the end of

June 2017 the committee can choose to note those actions and reconsider the outcomes at the end of the third quarter or it could choose to take further action.

 

 

 

 

4.   PREFERRED OPTION AND REASONS FOR RECOMMENDATIONS               

 

4.1     The committee is requested to note the content of the report and agree on any necessary action to be taken in relation to the budget position. 

 

 

5.   CONSULTATION RESULTS AND PREVIOUS COMMITTEE FEEDBACK                   

 

5.1     This report is not expected to lead to any consultation.

 

 

6.   NEXT STEPS: COMMUNICATION AND IMPLEMENTATION OF THE DECISION                                                                                     

 

6.1     The first quarter budget monitoring reports were considered by the

service committees in September 2017, apart from Communities, Housing and the Environment Committee where the meeting was cancelled, culminating which culminated in a full report to Policy and Resources committee on 20 September.

 

6.2     Details of the actions taken by service committees to manage the pressures in their budgets will be reported to Policy and Resources committee at this meeting.

 

 

7     CROSS-CUTTING ISSUES AND IMPLICATIONS

 

Issue

Implications

Sign-off

Impact on Corporate Priorities

This report monitors actual activity against the revenue budget and other financial matters set by Council for the financial year.  The budget is set in accordance

with the Council’s medium term

financial strategy which is linked to the strategic plan and corporate priorities.

Director of Finance & Business Improvement

Risk Management

The Council has produced a

balanced budget for both capital and revenue expenditure and income for 2017/18 This budget is

set against a backdrop of limited resources and an difficult economic climate. Regular and comprehensive monitoring of the type included in this report ensures early warning of significant issues

that may place the Council at

financial risk. This gives this

committee the best opportunity to take actions to mitigate such risks.

The issues set out in this report do not exhibit the level of potential risk identified in previous years.

Director of Finance & Business Improvement

Financial

Financial implications are the focus of this report through high level budget monitoring. The process of budget monitoring ensures that

services can react quickly to

potential resource problems. The process ensures that the Council is not faced by corporate financial problems that may prejudice the delivery of strategic priorities.

Director of Finance & Business Improvement

Staffing

The budget for staffing represents approximately 50% of the direct spend of the council and is carefully

monitored. Any issues in relation to employee costs will be raised in this and future monitoring reports.

Director of Finance & Business Improvement

Legal

The Council has a statutory

obligation to maintain a balanced budget this monitoring process

enables the committee to remain aware of issues and the process to be taken to maintain a balanced budget for the year.

[Legal Team]

Equality Impact Needs Assessment

The budget ensures the focus of resources into areas of need as identified in the Council’s strategic priorities. This monitoring report ensures that the budget is delivering services to meet those needs.

Director of Finance & Business Improvement

Environmental/Sustainable Development

No specific issues arise.

Director of Finance & Business Improvement

Community Safety

No specific issues arise.

Director of Finance & Business Improvement

Human Rights Act

No specific issues arise.

Director of Finance & Business Improvement

Procurement

No specific issues arise.

Director of Finance & Business Improvement

Asset Management

Resources available for asset

management are contained within both revenue and capital budgets and do not represent a significant problem at this time.

Director of Finance & Business Improvement

 

8         REPORT APPENDICES

 

The following documents are to be published with this report and form part of the report:

·         Appendix I: First Quarter 2017/18 Revenue Monitoring – Communities, Housing & Environment Committee

 

 

9         BACKGROUND PAPERS

 

None

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