MAIDSTONE BOROUGH COUNCIL
RECORD OF DECISION OF THE Cabinet
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Decision Made: |
08 August 2012 |
BUDGET MONITORING - FIRST QUARTER 2012/13
Issue for Decision
To consider the financial position of the revenue and capital budgets at the end of each of the first three quarters of the financial year, including a summary of Treasury Management performance as at the end of each quarter.
Decision Made
1. That the satisfactory revenue position at the end of the first quarter 2012/13 be noted.
2. That
the proposals for slippage and re-profiling in the capital programme to 2013/14
as set out in Appendix B to the report of the Head of Finance and Customer
Services be agreed.
3. That the detail in the report of the Head of Finance and Customer Services on the collection fund, general fund balances and treasury management activity be noted.
Reasons for Decision
The Director of Regeneration & Communities is the Responsible Financial Officer, and has overall responsibility for budgetary control and financial management, in accordance with the constitution. However, in practice day to day budgetary control is delegated to service managers, with assistance and advice from their director and the finance section. In consideration of this fact, whilst appreciating the need for Cabinet to remain fully aware of the Council’s financial situation, Cabinet agreed to receive these quarterly reports, including a section reporting on treasury management performance.
Revenue
The budget used in the report of the Head of Finance and
Customer Services is the agreed estimate for 2012/13 including the carry
forward resources agreed by Cabinet in May 2012. Actual expenditure to June
2012 includes all major accruals for goods and services received but not paid
for by the end of the quarter.
Analysis at a summary level of the full year budget, the profiled budget to June 2012 and expenditure to June 2012 is attached as Appendix A to the report of the Head of Finance and Customer Services. The profiled budget shows the total amount expected to be spent by June 2012 after considering the expected pattern of spend throughout the year for each budget head.
Appendix A to the report of the Head of Finance and Customer
Services shows actual spend is £0.38m less than the budget at the end of
quarter one. A detailed analysis of the figures at cost centre level shows 127
out of a total of 215 cost centres are currently reporting actual spend less
than budget, which mirrors the position throughout 2011/12.
As part of a series of changes to the budget monitoring and reporting process the financial analysis set out in Appendix A to the report of the Head of Finance and Customer Services is based on direct expenditure only. This removes the influence of internal recharges and accounting adjustments upon the variance analysis. It is hoped that, by the September 2012 period end, the reports will also provide a predicted year end position based on feedback from budget managers.
Also shown at Appendix A to the report of the Head of Finance and Customer Services is an analysis of cross service figures, which identifies that the majority of the underspend is focused on employee costs, due to continuing vacancy levels, and underspend in the cost of supplies and services. The budget agreed at Council each year, includes an assumption that normal vacancy levels will provide £0.15m slippage in a full year. Proportionately, £37,500 of the slippage assumption relates to this first quarter.
The third table at Appendix A to the report of the Head of
Finance and Customer Services summarises the position with regard to fees and
charges income. This was the subject of a separate report to Cabinet in
December 2011 as this has been an area that has been adversely affected by the
economic downturn. At the end of the first quarter income is slightly above the
target figure by £36,000. Specific issues regarding fees and charges income
from Development Control, On Street Parking and Park & Ride are dealt with
in more detail in the following paragraphs.
Since the budget was agreed by Council in February 2012 the government has announced a new burden grant of £84,000 for the localisation of Council Tax Benefit. This is included in the variance reported under the Leader of the Council. The grant will be required to fund the cost of changes to the Revenue & Benefits system and the cost of consultation. This will effectively reduce the underspend in later periods of this year.
A number of service areas are reporting significantly less spend or additional income than was budgeted at the end of quarter one and reports on these areas are given below:-
a)
Recycling collection is reporting an underspend of £30,357. There has
been better than anticipated income of £17,157, primarily from the hire of
green waste bins, although the additional income in this area is partially
offset by less than anticipated income from garden sack sales. It was noted
that the Cabinet Member for Environment had recently made a decision on service
changes that means a removal of the garden sacks. The service changes are
expected to provide additional benefit and any efficiency gain will be
considered in the Medium Term Financial Strategy.
b)
Development Control Applications are showing a significant increase from
fees and charges, with £51,028 additional income received to date. However,
there have been a number of large application fees received in the first
quarter. Cabinet should note that the service has commenced recruitment of an
additional member of staff on a 2 year fixed term contract to reflect the
current workload.
c) On Street Parking is showing greater than anticipated income of £17,520, as well as less than anticipated expenditure of £20,362. The Transport and Parking services manager has indicated that a programme of works for lines and signs has been identified, and this will be undertaken in bulk, during quarters 2 and 3, thus benefiting from economies of scale. The under spend on the repairs and maintenance therefore should reduce during the next two quarter.
A number of areas are showing significantly more spend or a shortfall in income than was actually budgeted at the end of quarter one, and these are reported below:-
a)
The Homelessness Temporary Accommodation budget is showing expenditure
greater than budget of £28,560. This budget experienced similar problems during
the last financial year, with expenditure on providing bed and breakfast
accommodation being significantly higher than the budgeted figure. Growth of
£60,000 was approved as part of the budget strategy for 2012/13 however demand
for this service continues to be higher than anticipated. The service manager
is working with the Cabinet Member to bring forward proposals to reduce this
pressure.
b) The Sundry Corporate Property budget is reporting expenditure greater than budget of £72,630. The main element of this is the vacant retail unit underneath King Street Multi-Storey Car Park, for which business rates are still due. Officers are currently in the process of evaluating future options for both the car park and the retail unit, and will report on these shortly.
c)
The East Wing development at the Museum has resulted in a business rates
bill of £97,423. However, budgetary provision for this was only £42,980. The
Property Services section are disputing the current valuation with a view to
achieving a reduction during the year. There are also a number of budgets where
expenditure is currently greater than anticipated by a total of £23,749. Given
that this is the first full year of the new development budgets are being
monitored closely to see what impact this has on both income and expenditure
budgets.
d) The budget for Park and Ride is showing a shortfall of £38,114 against the anticipated budget, mainly due to a continuing shortfall in income. The income levels have been decreasing for a number of years and this quarter’s income follows that trend.
The Transport & Parking Services manager is working closely with Arriva to improve service efficiency by rebalancing resources to meet service demand. Park and Ride processes and procedures are also under review to identify increased efficiency and further savings
At this stage the report of the Head of Finance and Customer
Services identified no risks that require action by Cabinet. The issues
identified above are expected to be resolved by appropriate management action
during the year.
Through the budget strategy, savings and efficiencies were
identified totalling £1.9m. These savings are being monitored corporately and
it is anticipated that the target will be met in year.
Balances
Balances as at 1st April 2012 were £10.1m. The current medium term financial strategy assumes balances of £5.7m by 31st March 2013. The major reasons for the movement in balances during 2012/13 relate to the use of carry forwards approved by Cabinet in May 2012.
The position set out above allows for the minimum level of balances of £2.3m as previously agreed by Cabinet.
Collection Fund
The collection rates achieved for the first quarter, and the
targets set, are reported below. The rate is given as a percentage of the debt
targeted for collection in 2012/13.
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Target % |
Actual % |
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NNDR |
33.1 |
34.3 |
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Council Tax |
30.1 |
30.1 |
Both are on or slightly above the collection targets, although
performance is stable and comparable to this point in previous years.
Prior year arrears collection is on target and officers will
continue to pursue payment of any developing arrears along with the arrears
from prior years.
Capital Expenditure
Attached at Appendix B to the report of the Head of Finance and Customer Services was a summary of the current capital programme for 2012/13, as agreed by Council. This includes the initial capital programme for the financial year plus amounts carried forward from 2011/12.
The table in Appendix B to the report of the Head of Finance and Customer Services gives the following detail:
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Column |
Detail. |
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1. |
Description of scheme, listed in portfolio order. |
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2. |
Approved budget for 2012/13 after the adjustments detailed above. |
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3. |
Actual spend to the end of June 2012. |
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4. |
Balance of budget available for 2012/13. |
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5 – 7. |
Quarterly analysis of expected spend for the remainder of 2012/13. |
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8. |
Balance of budget that will slip into 2013/14. |
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9. |
Budget no longer required. |
Capital expenditure to the end of the first quarter of 2012/13 is shown as £1.2m. £0.9m of this spend is in relation to the major projects at Mote Park and in the High Street.
Following the first quarters monitoring, officers anticipated that £0.118m will need to be reprofiled into 2013/14. This is detailed in column 8 of Appendix B to the report of the Head of Finance and Customer Services. Given below is an individual report on the major items:
a) £35,000 of the budget for Mote Park Regeneration is required to be slipped into 2013/14 to cover the funding for the Audience Development Manager.
b) The £5,200 budget for
CCTV at Park & Ride sites is no longer required.
c) £26,000 of the budget for Support for Social Housing can be slipped into 2013/14.
d) £50,000 of the budget for Gypsy Sites will not be required until 2013/14.
Capital Financing
The agreed capital programme 2011/12 to 2014/15, as approved by Council in March 2012, and subsequently amended by Cabinet in May 2012 and again in July 2012, identifies sufficient resources to finance the 2012/13 programme.
Resources that can currently be confirmed are:
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Funding Source: |
£.m |
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Grants & Contributions |
2.1 |
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Capital Receipts |
3.0 |
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Revenue Support |
3.9 |
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9.0 |
The capital receipts figures includes the disposals of Hayle Place and 13 Tonbridge Road which took place in April. Progress is also being made on a number of other potential disposals, which could realise further receipts during the year.
Based on the current projected expenditure shown at Appendix B to the report of the Head of Finance and Customer Services there are sufficient resources to fund the programme for the current year without the need to borrow.
The slippage and re-profiling agreed above will mean that net expenditure of £0.118m will be re-profiled into 2013/14.
Treasury Management
The Council has adopted and incorporated into its Financial Regulations, the CIPFA Code of Practice on Treasury Management 2009 (Revised) in Local Authorities. This Code covers the principles and guidelines relating to borrowing and investment operations. In March 2011 the Council approved a Treasury Management Strategy for 2011/12 that was based on this code. The strategy requires that Cabinet should be informed of Treasury Management activities quarterly as part of budget monitoring.
The first quarter of 2011/12 saw:
· Further weakening of the economic outlook.
· A rise in employment and a consequential fall in unemployment, but earnings growth remained weak.
· Continued reductions in the measures of inflation.
· The Bank of England & the HM Treasury announce measures to help the UK banking sector.
· The Monetary Policy Committee indicating another tranche of quantative easing.
· House prices dropping in two of the first three months.
The Council’s Treasury Management Advisors, Sector Treasury Management, provide the following forecast:
· The first base rate increase is expected to be in the first quarter of 2014.
· Rates are then expected to steadily rise reaching 1.5% by March 2015.
· Long term PWLB rates are expected to steadily increase to reach 5.10% by early 2015.
As at 30th June 2012 the Council held £28m in investments. A full list of investments held are shown at Appendix C to the report of the Head of Finance and Customer Services. £12m of investments in the appendix are in accounts which can be called upon immediately or for a short notice period.
During the first quarter of 2012/13 investment income has been above target. Income of £68k received compared to a budget of £57,000 with an average rate of 1.08%.
Alternatives considered and why rejected
The budget monitoring process could be left to officers.
The Constitution already requires officers to report budget variances to the
relevant Cabinet Member in specific circumstances. The absence of any such
reports would then suggest that no specific items have been identified for
consideration.
If such an approach were taken Cabinet Members would have a reduced financial awareness. This could restrict Cabinet’s ability to meet service requirements and achieve the Council’s corporate objectives.
Background Papers
Electronic budget monitoring and performance reports within financial systems.
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Should you be concerned about this decision and wish to call it in, please submit a call in form signed by any two Non-Executive Members to the Head of Change and Scrutiny by: 16 August 2012 |
MAIDSTONE BOROUGH COUNCIL
RECORD OF DECISION OF THE Cabinet
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Decision Made: |
08 August 2012 |
PLANNING PEER CHALLENGE - NEXT STEPS
Issue for Decision
To agree the actions that are to be taken following the planning peer challenge that the Council took part in in March 2012.
Decision Made
1. That the contents of the report of the Peer Challenge Team (as attached at Appendix A to the report of the Head of Change and Scrutiny) be noted and the recommendations within be agreed.
2. That the lead officers set out in Appendix B to the report of the Head of Change and Scrutiny and the actions to implement the recommendations to form part of those Lead Officers’ service plans as appropriate be agreed.
Reasons for Decision
Following the abolition of the Audit Commission’s Comprehensive Performance Assessment the Council agreed that alternative methods of ensuring continuous improvement would be sought. One of these methods is peer assessment, where trained peers undertake the role of “critical friend “and make recommendations for ways in which services could be enhanced or improved.
In March 2012 the Council invited a team of LGA trained peers to undertake a review, the purpose of which was to determine how planning can contribute to the Council’s overarching priority of increasing economic prosperity. The team, comprising two officers, one Councillor and one LGA employee spent three days on site interviewing a wide range of people including officers, elected Members and developers. Using the information gathered the review team wrote a report (attached at Appendix A to the report of the Head of Change and Scrutiny) making a number of recommendations for improvement.
Following the production of the report an internal officer group was set up to look at the recommendations to see what work is already being undertaken and agree who would be best placed to carry each one forward (attached at Appendix B to the report of the Head of Change and Scrutiny). Cabinet was asked to agree that these recommendations should now be progressed, as proposed in Appendix B to the report of the Head of Change and Scrutiny.
One of the recommendations relates to the refresh of the Economic Development Strategy. This refresh will take into account discussions that were held with the Peer Challenge Team, remembering that the Council’s overarching priority is economic prosperity. Individual actions from the Economic Development Strategy once agreed will be added to service plans.
Two members of the Peer Challenge Team, along with Adam Dodghson from the Planning Advisory Service (PAS) returned to the Council in June 2012 to carry out an action planning day, discussing the recommendations from the challenge and informing the Council of a range of support services that PAS can offer the Council in moving forward.
Alternatives considered and why rejected
The Council could choose not to implement the recommendations in the report. However, this would lead to a number of improvements not being made.
Background Papers
None
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Should you be concerned about this decision and wish to call it in, please submit a call in form signed by any two Non-Executive Members to the Head of Change and Scrutiny by: 16 August 2012 |
MAIDSTONE BOROUGH COUNCIL
RECORD OF DECISION OF THE Cabinet
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Decision Made: |
08 August 2012 |
CORPORATE PLANNING TIMETABLE
Issue for Decision
To agree the timetable for strategic and financial planning 2012-13
Decision Made
That the strategic plan and the corporate planning timetable, as set out below, be agreed:-
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Date |
Action |
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8 August 2012 |
Cabinet consider the corporate planning timetable |
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August – November 2012 |
· Assessment of progress against priorities and outcomes · Informal discussions with Cabinet · Meetings with Heads of Service and officers · Identification of savings and growth items · Scrutiny Budget Working group to look at proposals · Review of strategic risk management
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September to October 2012 |
Budget Consultation |
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December 2012 |
Updated Strategic Plan and MTFS agreed for consultation by Cabinet |
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January 2013 |
Corporate Services Overview and Scrutiny consider updated Strategic Plan and Medium Term Financial Strategy and make recommendations to Cabinet |
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February 2013 |
Cabinet consider Strategic Plan and Medium Term Financial Strategy and recommend to Council |
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February 2013 |
Council agree and adopt the Strategic Plan and Medium Term Financial Strategy
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April 2013 |
Implementation of the Updated Strategic Plan and Medium Term Financial Strategy
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Reasons for Decision
The corporate planning process within the Council ensures the overall vision for the borough is delivered. The priorities and outcomes in the Strategic Plan are developed alongside the Medium Term Financial Strategy (MTFS) to ensure a consistent approach between service delivery and budgets. Service planning allows the Council to convert high level objectives from the Strategic Plan into actions for each directorate, service or team across the Council, which then feeds into individual staff appraisals.
On 12 August 2009 Cabinet agreed to decide annually whether to update the existing Strategic Plan or to create a new one. Following extensive change in the national arena it was agreed to write a new Strategic Plan 2011/12 to take the Council through to 2015 alongside the MTFS. It is recommended that as the plan is only 2 years into its 4 year life, the plan for 2011-15 is updated for 2013-14. The update will include the work of the Cabinet on the future shape of the organisation and medium term planning and prioritisation of the actions required to achieve the outcomes outlined in the Strategic Plan.
An update would include:
· A review of all the outcomes and associated actions;
· An update of performance against the Key Performance indicators;
· An update of what was achieved in the year (in 2012/13 we…);
· An update to any local or national context where relevant;
· An update to the foreword; and
· An update on the Sustainable Community Strategy refresh if available, including a decision on whether it will be amended to become the main document for the Locality Board, renamed the Community Strategy.
The following timetable is proposed for the development of the 2013/14 update.
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Date |
Action |
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8 August 2012 |
Cabinet consider the corporate planning timetable |
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August – November 2012 |
· Assessment of progress against priorities and outcomes · Informal discussions with Cabinet · Meetings with Heads of Service and officers · Identification of savings and growth items · Scrutiny Budget Working group to look at proposals · Review of strategic risk management
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September to October 2012 |
Budget Consultation |
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December 2012 |
Updated Strategic Plan and MTFS agreed for consultation by Cabinet
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January 2013 |
Corporate Services Overview and Scrutiny consider updated Strategic Plan and Medium Term Financial Strategy and make recommendations to Cabinet
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February 2013 |
Cabinet consider Strategic Plan and Medium Term Financial Strategy and recommend to Council |
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February 2013 |
Council agree and adopt the Strategic Plan and Medium Term Financial Strategy
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April 2013 |
Implementation of the Updated Strategic Plan and MTFS
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Alternatives considered and why rejected
Cabinet could decide to produce a full new Strategic Plan for 2013-17. This was not recommended as a new strategic plan was only created two years ago.
Alternatively, Cabinet could decide that the Council already has a four year plan in place and therefore there is no reason to produce either an update or another full document. This was not recommended as the local and national context is constantly changing and the Council needs to be able to demonstrate how it is planning and managing the issues arising from these changes.
Background Papers
Strategic Plan 2011-15
Sustainable Community Strategy
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Should you be concerned about this decision and wish to call it in, please submit a call in form signed by any two Non-Executive Members to the Head of Change and Scrutiny by: 16 August 2012 |