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.

Cabinet considered a report on the forecast financial position for both revenue and capital to 31 March 2011 and were updated on the Directorates’ recovery plans instigated to address projected overspends.  Additionally the report provided information on treasury management activities in the first six months of 2010/11 and the number and amounts written off for individual debts exceeding £1,000 covering the period 1 April 2010 to 30 September 2010.

The Cabinet in discussion make the following comments:

• The finance team was congratulated on clearer budgeting and reinvestment. 
• The rise in write offs was noted as a feature of the current economic climate, but needed to be monitored.
• Whilst appreciating that the pattern of reported overspend was as in previous years, the action from JMT on recovery plans and the reduction in discretionary spend was welcomed.
• 2010/11 would be the last year that local government would be financed to the current degree.  Future years would be different and challenging.  It was essential to explain to the public how the council would deliver its obligations in such changing times.
• Particular note was given to the council’s treasury management expertise in dealing with short term borrowing and liquidity management as well as the council’s AAA rating.  A 50 year borrowing term of 3.9% was highlighted as being very beneficial to the council.  Responding to a concern about borrowing exposure, assurance was provided that, as indicated in the treasury management interim report, the council’s borrowing exposure was conservative.
• It was recognised that financial issues relating to the Integrated Commissioning Directorate would remain.  A further £2billion had been announced from Government to support local government over the next four years as the acute need of Adult Social Care had been acknowledged as an issue across all local authorities.

In responding to comments and questions, the Director of Resources stated that:

• In managing of the council’s finances it was essential to balance risk against opportunity.  Assurances were provided that policies were in place to ensure that sound decisions were made, however no decision would ever be risk free.
• In recognising that there had been some concerns about collecting information across systems, the council would be implementing the Agresso system across all Directorates from April 2011. 

RESOLVED that:

a)      the report and the forecast deficit position of £2.4m be noted;

b)     the Chief Executive’s requirement that Directors deliver recovery plans to support delivery of balanced revenue budget be noted; and

c)      it be noted that 66 debts totalling £185k be written off.