Your Councillors


STRATEGIC PLANNING, SUSTAINABILITY AND TRANSPORT COMMITTEE

8 November 2016

Is the final decision on the recommendations in this report to be made at this meeting?

Yes

 

Second Quarter Budget Monitoring 2016/17

 

Final Decision-Maker

Strategic Planning, Sustainability and Transport Committee

Lead Head of Service

Director of Finance and Business Improvement

Lead Officer and Report Author

Ellie Dunnet

Chief Accountant

Classification

Public

Wards affected

All

 

 

This report makes the following recommendations to this Committee:

That the Committee:

That the Committee nNotes the revenue position at the end of the second quarter and the actions being taken or proposed to improve the position where significant variances have been identified.

 

 

This report relates to the following corporate priorities:

The budget is a statement, in financial terms, of the priorities set out in the strategic plan. It reflects the Council’s decisions on the allocation of resources to all objectives of the strategic plan. The issues raised in this report identify areas where financial performance is at variance with priority outcomes.

 

 

Timetable

Meeting

Date

Strategic Planning, Sustainability and Transport Committee

8 November 2016

Policy & Resources Committee

23 November 2016



Second Quarter Budget Monitoring 2016/17

 

 

1.        PURPOSE OF REPORT AND EXECUTIVE SUMMARY

 

1.1     This report provides the Committee with an overview of the revenue budget and outturn for the second quarter of 2016/17, and highlights financial matters which may have a material impact on the medium term financial strategy or the balance sheet.

 

1.2     As at 30 September 2016, this committee was showing a minor overall favourable variance of £21,252, although there are significant adverse and favourable variances within this total.  The individual variances for each service area are detailed at Appendix I.

 

1.3     The position for the Borough Council as a whole at the end of the second quarter shows an increase in the overspend forecast at the end of the first quarter.  Additional controls for the over spending have been introduced introduced to address this and are detailed at paragraph 2.78 of this report.

 

 

2.        INTRODUCTION AND BACKGROUND

 

2.1     The Director of Finance & Business Improvement is the Responsible Financial Officer and has overall responsibility for budgetary control and financial management.  However, in practice, day to day budgetary control is delegated to Service Managers, with assistance and advice from their Director and the Finance section.

 

2.2     The medium term financial strategy for 2016/17 onwards was agreed by Council on 2 March 2016.  This report advises and updates the Committee on the current position with regards to revenue expenditure against the approved budgets.

 

2.3     Attached at Appendix I is a table detailing the current budget and

expenditure position for this Committee’s services in relation to the second

quarter of 2016/17, to September 2016. The Appendix details the net budget per cost centre for this Committee, excluding capital charges. Actual expenditure is shown to the end of September 2016 and includes accruals for goods and services received but not yet paid for.

 

2.4     The columns of the table in the Appendix show the following detail:

 

a)   The cost centre description;

b)   The value of the total budget for the year;

c)   The amount of the budget expected to be spent by the end of September 2016;

d)   The actual spend to that date;

e)   The variance between expected and actual spend;

f)    The forecast spend to year end; and

g)   The expected significant variances at 31 March 2017.

 

2.5     Appendix I shows that of an annual budget of -£738,780 there was an expectation that net income of -£252,180 would be achieved by the end of the second quarter. At this point in time, the budget position for this Committee as a whole is a minor underspend of £21,252.  However, the full year forecast indicates that there is expected to be a net underspend of £110,000 by 31 March 2017. 

 

2.6     Explanations for variances within individual cost centres which exceed or are expected to exceed £30,000 are provided below in accordance with the Council’s Constitution:

 

 

Positive

Variance

Q2

£000

Adverse

Variance

Q2

£000

Year end

Forecast

Variance

£000

Strategic Planning, Sustainability and Transport Committee

 

 

 

Pay & Display Car Parks –Lockmeadow and King Street car parks have significantly outperformed against their income targets, despite the increased income budgets which were set for 2016/17.  This trend is expected to continue through to the end of 2016/17.   It should be noted that the forecast incorporates a shortfall of £50,000 for Mote Park car park.  This has been offset against the overall underspend in the forecast outturn.

174

 

300

On-Street Parking – the surplus position in this area is expected to be maintained through to the year end.  It should be noted that this surplus is ring-fenced.

29

 

60

Development Management – there is an overspend on staff costs including agency staff which is not being met by current income levels.  The Head of Service is aware of the problem and is exploring options for addressing the issue.  These include the Planning Review that is being considered elsewhere on this meeting’s agenda.

 

-187

-300

Building Regulations – income is currently above budget in this area, and the underspend is expected to continue through to the end of the year.  It should be noted that this service is required to break even on a rolling three year basis.

 

39

 

50

Strategic Planning, Sustainability and Transport Total

 

 

110

 

2.7     The overall forecast for the Council at the end of the second quarter is an increase in the overspend projected at the end of the first quarter, despite planned actions to address this.  Increased control in the following areas of spending have therefore been introduced across the Council with immediate effect in order to improve the current position:

 

1. Recruitment;

2. Temporary staff;

3. Discretionary spending; and

4. Contractual commitments.

 

 

 

3     AVAILABLE OPTIONS

 

3.1     In considering the current position on the revenue budget at the end of

September 2016, the Committee can choose to note those actions and reconsider the outcomes at the end of the third quarter.

 

3.2   Alternatively, it could choose to take further action upon the consideration of the reported current position.

 

 

4         PREFERRED OPTION AND REASONS FOR RECOMMENDATIONS

 

4.1     The Committee is requested to note the content of the report and agree on any necessary action to be taken [KJ1] in relation to the budget position. 

 

 

5         CONSULTATION RESULTS AND PREVIOUS COMMITTEE FEEDBACK

 

5.1     This report is not expected to lead to any consultation.

 

 

6         NEXT STEPS: COMMUNICATION AND IMPLEMENTATION OF THE DECISION

 

6.1     The second quarter budget monitoring reports will be considered by the

Service Committees in November 2016, culminating in a full report to Policy and Resources Committee on 23 November.

 

6.2     Details of the actions taken by Service Committees to manage the pressures in their budgets will be reported to Policy and Resources Committee at this meeting.

 

 

 

 

 

 

7         CROSS-CUTTING ISSUES AND IMPLICATIONS

 

Issue

Implications

Sign-off

Impact on Corporate Priorities

This report monitors actual activity against the revenue budget and other financial matters set by Council for the financial year.  The budget is set in accordance

with the Council’s medium term

financial strategy which is linked to the strategic plan and corporate priorities.

Director of Finance & Business Improvement

Risk Management

The Council has produced a

balanced budget for both capital and revenue expenditure and income for 2016/17 This budget is

set against a backdrop of limited resources and an difficult economic climate. Regular and comprehensive monitoring of the type included in this report ensures early warning of significant issues

that may place the Council at

financial risk. This gives this

committee the best opportunity to take actions to mitigate such risks.

The issues set out in this report do not exhibit the level of potential risk identified in previous years.

Director of Finance & Business Improvement

Financial

Financial implications are the focus of this report through high level budget monitoring. The process of budget monitoring ensures that

services can react quickly to

potential resource problems. The process ensures that the Council is not faced by corporate financial problems that may prejudice the delivery of strategic priorities.

Director of Finance & Business Improvement

Staffing

The budget for staffing represents approximately 50% of the direct spend of the council and is carefully

monitored. Any issues in relation to employee costs will be raised in this and future monitoring reports.

Director of Finance & Business Improvement

Legal

The Council has a statutory

obligation [KJ2] to maintain a balanced budget. This monitoring process

enables the Committee to remain aware of issues and the process to be taken to maintain a balanced budget for the year.

Kate Jardine, Team Leader (Planning), Mid Kent Legal Services

Equality Impact Needs Assessment

The budget ensures the focus of resources into areas of need as identified in the Council’s strategic priorities. This monitoring report ensures that the budget is delivering services to meet those needs.

Director of Finance & Business Improvement

Environmental/Sustainable Development

No specific issues arise.

Director of Finance & Business Improvement

Community Safety

No specific issues arise.

Director of Finance & Business Improvement

Human Rights Act

No specific issues arise.

Director of Finance & Business Improvement

Procurement

No specific issues arise.

Director of Finance & Business Improvement

Asset Management

Resources available for asset

management are contained within both revenue and capital budgets and do not represent a significant problem at this time.

Director of Finance & Business Improvement

 

8         REPORT APPENDICES

 

The following documents are to be published with this report and form part of the report:

·         Appendix I: Second Quarter 2016/17 Revenue Monitoring – Strategic Planning, Sustainability and Transport

 

 

9         BACKGROUND PAPERS

 

None


 [KJ1]This goes further than simply noting the report. If your “recommendation” is that they do not need to take any further action until the outcome of the third quarter (when you will presumably be reporting back to them?) then that needs to be set out.

 [KJ2]Can you let me know the source please (I’m a planning lawyer!)