Meeting documents

1 THE ISSUE

1.1 This report presents the first monitoring information for the Authority as a whole for the financial year 2007/08 to the end of July 2007. The report also includes a number of virement requests for both revenue and capital that require Council Cabinet agreement or are reported for information purposes as prescribed by the Budget Management Scheme.

2 RECOMMENDATION

2.1 Strategic Directors should continue to work towards managing within budget in the current year for their respective service areas, and to manage below budget where possible by not committing unnecessary expenditure, through tight budgetary control.

2.2 This year's revenue budget position as shown in Appendix 2 is noted.

2.3 The capital expenditure position for the Council in the financial year to the end of July and the year end projections detailed in Appendix 3 of this report are noted.

2.4 The 2007/08 virements listed in Appendix 4(i) are approved and the changes in the capital programme listed in Appendix 5(i) are noted.

2.5 The Cabinet note the update on the efficiency group detailing current progress against the savings target and its future role (paragraph 7.7).

3

FINANCIAL IMPLICATIONS

3.1 The financial implications are contained within the body of the report.

4 COMMUNITY STRATEGY OUTCOMES

4.1 The report concerns the financial management of the Council which underpins implementation of the corporate plan, and hence the delivery of community strategy outcomes.

5 CORPORATE IMPROVEMENT PRIORITIES

5.1 The Annual Financial and Service Planning process allocates scarce resources across services with alignment of these resources towards our corporate improvement priorities as set out in the Corporate Plan. This report monitors how the Council is performing against the financial targets set in February 2007 through the Budget setting report.

6 CPA LINES OF ENQUIRY

6.1 The report provides the Cabinet with information on financial performance against the Council's budget as required under the "Financial Management" Key Line of Enquiry, which is part of the Use of Resources element of the CPA.

7 THE REPORT

7.1 The Budget Management Scheme requires that the Council Cabinet consider the revenue and capital monitoring position on a quarterly basis.

7.2 For revenue, where overspent, services are expected to seek compensating savings to try and bring budgets back to balance. The Budget Management Scheme states that if overspending occurs it must be recovered.

7.3 Significant areas of revenue over and under spend are highlighted in Appendix 1. Management actions are being developed to ensure that, as far as possible, all overspends will be brought into balance by the year end, however, there are clear pressures emerging at an early stage, and these may increase further as the year proceeds. A summary of the risks in achieving these management actions are detailed in Appendix 1.

7.4 Appendix 2 outlines the Council's current revenue financial position for the 2007/08 financial year to the end of July 2007 by cabinet portfolio. Previous indications were that there could be a potential overspend of £4,248,000 earlier in the financial year. The year end forecast overspend has now been reduced, and Appendix 2 shows that the forecast year-end overspend in now £1,928,000 (or 1.85 % of net budget). The improved position results from the identification of £960,000 of efficiency savings and £1,360,000 of capital financing savings. The Directors are developing proposals to bring expenditure back within budget. Appendix 3 outlines the Council's current capital financial position for the same period and shows spend to the end of July 2007 totalling £5.454m or 47.6% of profiled spend.

7.5 The Council's financial position, along with its financial management arrangements and controls are fundamental to continuing to plan and provide services in a managed way. Close monitoring of the financial situation provides information on new risks and pressures in service areas, and appropriate management actions are then identified and agreed to manage and mitigate those risks.

7.6 In February the Council resolved that there should be a report back to the Executive/(Cabinet) detailing how the efficiency savings target will be met, and also that the Executive/(Cabinet) should ensure that a proper process for consideration and management of the further efficiency savings target is put in place.

7.7 The Strategic Directors Group (SDG) have set up the efficiency group to develop proposals on its behalf. The Chair (John Betty) reports to SDG via the Chief Executive. To date, efficiency savings of £0.960m against the target of £1.960m have been identified by Finance and Policy & Partnerships and are being implemented as follows:

7.8 When the savings in capital financing are taken in to account, this more than offsets the efficiency shortfall in the current financial year. The Efficiency Group will now be working to close the gap in 2008/09.

7.9 SDG are currently reconsidering the role of the efficiency group. SDG intend that the efficiency group role will include:

Monitoring (in terms of increased productivity and reduced costs) the outcomes of the Service Transformation Programme

Innovation

o Identifying and leading cross service initiatives aimed at increasing productivity and reducing the cost base

o Incubating new ideas and identifying and sharing best practice

Scrutiny

Monitoring Value For Money (VFM) and investigating as necessary

7.10 Revenue budget virements requiring cabinet approval are listed in Appendix 4(i) together with an explanation of why the virement is necessary.
Appendix 4(ii) indicates the effect upon service and portfolio cash limits if these proposals are approved.

7.11 The revenue virements proposals includes changes to the cash limit presentation in Children's Services, adjustments to insurance budgets affecting most services required to reflect savings from the re-tending of insurance, and adjustments already agreed in respect of carry forwards reported in the outturn report in June 2007.

7.12 Revisions are being proposed to Council in September in respect of the Budget Management Scheme which will differentiate between technical virements and non technical virements. Technical virements (i.e not involving any policy decisions) will no longer have to be reported.

7.13 Changes to the capital programme are listed in Appendix 5(i), while Appendix 5(ii) provides the updated capital programme allocated by portfolio.

8 RISK MANAGEMENT

8.1 A risk assessment related to the issue and recommendations has been undertaken, in compliance with the Council's decision making risk management guidance.

9 RATIONALE

9.1 The report is presented as part of the reporting of financial management and budgetary control required by the Council.

10 OTHER OPTIONS CONSIDERED

10.1 None.

11 CONSULTATION

11.1 Consultation has been carried out with the Leader of The Council, Other B&NES Services, Section 151 Finance Officer, Chief Executive and Monitoring Officer.

12 ISSUES TO CONSIDER IN REACHING THE DECISION

12.1 This report deals with issues of a corporate nature.

13 ADVICE SOUGHT

13.1 The Council's Monitoring Officer (Council Solicitor) and Section 151 Officer have had the opportunity to input to this report and have cleared it for publication.