Budget Strategy Risk Assessment Update
The Committee considered the report of the Director of Finance and Business Improvement updating the risk assessment of the Budget Strategy.
It was noted that the risk profile had been reviewed by the Finance Service with input from Internal Audit since it was last presented to the Committee in January 2017. Most of the factors considered in the review had had no, or only marginal, implications for risk impact and likelihood. The only exception was commercialisation where the risk was that the commercial activities currently being delivered and projected in the Medium Term Financial Strategy did not deliver the expected level of income. The budget overspend on the Mote Park Café was now projected to be £197k, and the decision had been made to outsource the management of the Café from autumn 2017 to mitigate the risk. Whilst mitigation measures were being put in place, for the time being it was considered appropriate to increase the risk likelihood score from 2 to 3 for commercialisation and this was reflected in the risk matrix and risk register.
In response to questions, the Director of Finance and Business Improvement explained that:
· In terms of the risks associated with the delivery of savings, plans for delivering savings in 2017/18 would be reviewed early in the new financial year and the risks would be reassessed.
· It should be recognised that risks were not usually discrete and there were inter-relationships between the risks.
· There was a difference between setting and delivering a balanced budget and the risk register would be amended accordingly. The Strategic Revenue Projections indicated a balanced budget position for the Council in 2017/18 and 2018/19 provided that all planned savings were delivered. However, there was a shortfall between savings identified and savings required in the remaining three years of the five year budget planning period due to the “negative Revenue Support Grant” that the Government planned to levy on the Council in 2019/20 and uncertainty around future local government funding following the end of the current four year funding settlement from 2020/21 onwards.
· The commercialisation agenda was now focused on housing, commercial property and regeneration, and there was a better understanding of the skills available in-house and the areas where it was necessary to bring in outside expertise. For example, consultants were being used to procure a contractor for the Mote Park Adventure Zone.
· Whilst the Internal Audit and Assurance Plan 2017/18 included a review of the Council’s contract management arrangements, measures were being put in place to achieve minimum standards for contract management.
During the discussion on this item, it was suggested and agreed that, to provide assurance, an update should be provided at a future meeting of the Committee on the minimum standards to be adhered to by contract managers as a regulatory regime, together with examples.
1. That the updated risk assessment of the Budget Strategy, attached as Appendix A to the report of the Director of Finance and Business Improvement, be noted.
2. That the risk register be amended to reflect the difference between setting and delivering a balanced budget.
3. That an update be provided at a future meeting of the Committee on the minimum standards to be adhered to by contract managers as a regulatory regime, together with examples.
- AGS 20-03-17 - Budget Risks, item 74. PDF 64 KB View as HTML (74./1) 63 KB
- AGS 20-03-17_Budget Risks_Appendix A, item 74. PDF 175 KB View as HTML (74./2) 84 KB