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 second quarter of 2016/17, 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 September 2016, this committee is projected to show an overall adverse variance for the financial year of £25,000.  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 second quarter shows an increase in the overspend forecast at the end of the first quarter.  Additional controls over spending introduced to address this are detailed at paragraph 2.8 of this report.

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 2016/17 onwards was agreed by full Council on 2 March 2016.  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 second

quarter of 2016/17, to September 2016. The appendix details the net budget per cost centre for this Committee. Actual expenditure is shown to the end of September 2016 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 September 2016;

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 2017.

2.5     Appendix I shows that of a net annual expenditure budget of £4,802,777 it was expected that £2,033,154 would be spent during the first half of the year.   These totals include internal recharges.  At this point in time the budget is reporting an under spend of £11,625, although the current forecast indicates that the current underspend will not be sustained through to the year end.

2.6     Currently the outturn position for this committee is a forecast net overspend of £25,000.  The major variances within this total relate to the overspend within Mote Park Café and the projected underspend for the crematorium.  Further detail relating to these items is provided in Appendix I.

2.7     Explanations for variances within individual cost centres which exceed or are expected to exceed £30,000 have been provided in accordance with the council’s constitution.

2.8     The overall forecast for the council at the end of the second quarter is an increase in the overspend projected at the end of the first quarter, despite planned actions to address this.  Increased control in the following areas of spending have therefore been introduced across the council with immediate effect in order to improve the current position:

1. Recruitment;

2. Temporary staff;

3. Discretionary spending; and

4. Contractual commitments.

3     AVAILABLE OPTIONS

3.      

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

September 2016 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.      

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.      

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

6         NEXT STEPS: COMMUNICATION AND IMPLEMENTATION OF THE DECISION

6.      

6.1     The second quarter budget monitoring reports will be considered by the

service committees in November 2016, culminating in a full report to Policy and Resources committee on 23 November.

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

8         REPORT APPENDICES

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

·         Appendix I: Second Quarter 2016/17 Revenue Monitoring – Heritage, Culture & Leisure

9         BACKGROUND PAPERS

None