To report on the Council’s performance against revenue and capital budgets as at 31 August 2008 and provide an indication of the estimated outturn for the 2008/09 financial year.

The Cabinet considered a report on the Council’s performance against revenue and capital budgets as at 31 August 2008 and provided an indication of the estimated outturn for the 2008/09 financial year. 

The Cabinet Member for Resources informed Cabinet that the basis for the current forecast was sound and reliable. The key message was that the Council’s financial policy that Directors must manage service delivery within or below the approved budget remains in force and that it was expected that the projected expenditure levels would show improvement at the next meeting. Financial pressures were being experienced and as cash resources become tighter the Council needs to focus on making sure the needs of the community were met within the financial constraints.

The Head of Financial Services informed Cabinet that the report covered the first five months of the financial year. With a net projected overspend as detailed in the report, the message must be that position has to improve. The impact of the projected overspend at the year end would reduce the revenue reserves position and this was shown in paragraph 5 of the report. The further allocation of central government funding for the 2007 floods from the Restoration Fund, paragraph 7 of the report refers, would be used to offset budget pressures in the highways service.

The Adult Social Care Directorate projected overspend was based on the assumption that the result of the ongoing review of eligibility criteria for continuing health care, future funding for some clients would come the Primary Care Trust (PCT), paragraph 9 of the report refers.

The Children and Young People’s Directorate was showing a net projected overspend and that the pressure could rise in respect of the estimated external residential places needed throughout the remainder of the financial year.

The Deputy Chief Executive’s Directorate projected overspend was due to the reduction in local land charges income and uncertainty in the costs relating to the Coroner’s Service, paragraph 30 of the report refers. It was pleasing to report that Information Communications Technology was operating to a balanced budget.

The Environment and Culture Directorate was showing a projected overspend after being assisted by funds from the Restoration Fund. The pressures on the budget will be from highway maintenance resulting from winter conditions, the loss of car parking income and a job evaluation issue, paragraph 47 of the report refers.

The Regeneration Directorate was showing a net overspend based on income to date and anticipated income.

The Resources Directorate was on budget although managing some significant pressures as identified in the report

The Vice-Chairman of Strategic Monitoring Committee asked when the PCT would give an answer on the review of cases against the continuing health care criteria. The Chief Executive stated that if people are eligible for continuing health care, the PCT will pay for it.

Responding to a query on Modernisation Plans funds held in Earmarked Reserves, the Chief Executive reminded Members that this fund was a contribution from the PCT which had been matched by the Council, towards the expenditure on the development of closer integrated working arrangements between the Council and the PCT.

The Vice-Chairman of Strategic Monitoring Committee referred to central government’s Restoration Fund allocation for the 2007 floods and queried if this met the full cost of the expenditure.

In response to a query from a member in attendance, the Head of Financial Services informed Cabinet that the Bellwin Threshold fund in the Earmarked Reserves was a reserve against future Bellwin claims. The previous years Bellwin claim has been resolved and there a new claim was being put forward. The Bellwin Threshold fund in the Earmarked Reserves is for this financial year.

The Cabinet Member for Corporate and Customer Services and Human Resources referred Cabinet to page 142, paragraph 47 of the agenda regarding HALO job evaluation.  The Cabinet Member stated she was concerned as she believed it had been agreed that job evaluation would be dealt with as a corporate issue.  The Chief Executive confirmed that any job evaluation issues would be looked at and dealt with in line with the agreed policy.

The Head of Financial Services referred to the capital programme budget monitoring (Appendix B refers) and emphasised that there was evidence of slippage as in previous years but that efforts would be made to alleviate that problem. The Prudential borrowing total referred to in paragraph 9 of Appendix B included a loan of £5 million recently taken in line with the Council’s borrowing strategy because attractive interest rates were available.

The Cabinet Member for Highways and Transportation made reference to the Ross flood alleviation scheme and whether central government would be covering the total cost. The Head of Financial Services stated that his understanding was that the over spend would be covered by additional grant funding from the government.

With regard to several queries raised by Members in attendance, the Head of Financial Services stated that he would inform those Members and Cabinet Members of the total cost of borrowing £1 million and provide details of the Council’s borrowing position compared to other local authorities.

RESOLVED:   that

(a)       the forecast outturn for 2008/09 agreed with Directors based on service and financial performance outlined in this report be noted;

(b)       the continuing efforts of all Directors to ensure service targets are met within the approved budget be endorsed; and

(c)               an improved forecast of outturn for the 2008/09 financial year be     reflected in the next financial monitoring report.