To report the forecast financial position for both revenue and capital to 31 March 2011 and provide an update on Directorates’ recovery plans instigated to address projected overspends.

The Cabinet Member Resources presented the Budget Monitoring Report 2010/11, which was the financial forecast position for both revenue and capital to the end of 31 March 2011.  The Cabinet Member updated Cabinet on the following points:

• The figures were based on the position as at the end of December 2010.
• The report confirmed that the requirement for directors to deliver recovery plans was now proving effective, with the reduction in discretionary spend in order to find additional savings to support the Council’s revenue position.
• There was a projected overspend of £2.2m on a revenue budget of £143m, however, plans that had been put in place were now taking effect.
• Services for Integrated Commissioning were still under pressure.  Through government health bodies there is £800k of available funding in 2010/11, which was being actively pursued by the partnership to ensure maximum use of the funding.
• The capital programme at the end of December totalled £69.7m and is fully funded from a variety of places, including government grants of £39m.
• Treasury management activity showed that the budget for interest receivable would be exceeded by £100k.
• Due to the winter weather there had been additional pressure on the Sustainable Communities budget and the £500k winter weather reserve is required to ease the pressure.
• Cabinet noted that two directorates had not reduced their discretionary overspend significantly and it was requested that this was investigated further. 
• Cabinet discussed the proposed waste disposal unit to be built in Worcester, which was a joint project between Worcestershire and Herefordshire Councils, and the amount of funding held in reserves for this project.  Cabinet was reminded that this fund had been built into the reserves over a number of years and was part of the Council’s financial plans.  It was confirmed that this was a reserve against risk, if the planning application was successful when it went before Worcestershire Council’s Planning Committee, then this funding would be built into the financial strategy.

RESOLVED:

         That Cabinet:

a)                Noted the report and the forecast deficit position of £2.2m; and

b)               Noted the Chief Executive’s requirement that directors deliver recovery plans to ensure a balanced revenue budget.