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CORPORATE SERVICES POLICY ADVISORY COMMITTEE |
13 March 2024 |
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3rd Quarter Finance, Performance & Risk Monitoring Report 2023/24 |
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Will this be a Key Decision? |
No |
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Urgency |
Not Applicable |
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Final Decision-Maker |
Cabinet |
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Lead Head of Service |
Mark Green, Director of Finance, Resources & Business Improvement |
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Lead Officer and Report Author |
Paul Holland, Senior Finance Manager Carly Benville, Senior Information Analyst Alex Czabaniuk, Economic Development Officer Uche Olufemi, Emergency Planning & Resilience Manager |
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Classification |
Public |
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Wards affected |
All |
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Executive Summary
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This report sets out the 2023/24 financial and performance position for the services reporting into the Corporate Services Policy Advisory Committee (CS PAC) as at 31st December 2023 (Quarter 3). The primary focus is on:
• The 2023/24 Revenue and Capital budgets; and
• The 2023/24 Key Performance Indicators (KPIs) that relate to the delivery of the Strategic Plan 2019-2045.
· Corporate Risk Register
The combined reporting of the financial and performance position enables the Committee to consider and comment on the issues raised and actions being taken to address both budget pressures and performance issues in their proper context, reflecting the fact that the financial and performance-related fortunes of the Council are inextricably linked.
Budget Monitoring
At the Quarter 3 stage the Council has incurred net expenditure of £12.131m against the approved profiled budget of £11.795m, representing an overspend of £0.337m. The projected year-end outturn position at this stage is an overspend of £0.239m. Overall net expenditure at the end of Quarter 3 for the services reporting to CS PAC is £3.675m, compared to the approved profiled budget of £4.569m, representing an underspend of £0.895m.
At the Quarter 3 stage, the Council has incurred overall net expenditure of £18.430m against a budget allocation within the Capital Programme of £57.965m. The projected year-end expenditure is £29.236m.
Capital expenditure at the end of Quarter 3 for CS PAC was £1.574m against a total budget of £16.439m.
The budgets used in this report are the revised estimates for 2023/24.
Performance Monitoring
50% (1 out of 2) of the Key Performance Indicators for this Policy Advisory Committee achieved their Quarter 3 target. Across the other three Committees a number of targets were missed, mainly due to current issues with the economy, although there were improvements in a number of other areas.
UK Shared Prosperity Fund Update
An update on progress made against schemes using this funding is shown at Appendix 3.
Corporate Risk Update
Appendix 4 outlines all the Council’s corporate risks. The corporate risk ratings and scores have remained largely consistent with the last report in September. There have however been significant changes in two corporate risks resulting in their elevation from red to black risks. These are a diminished local retail and leisure sector and the Council not fulfilling residential property health and safety responsibilities.
Procurement Levels
The council wishes to update its contract procedure rules to provide a consistent approach across the procurement partnership, and also to reflect increased costs from inflation since the levels were originally set in 2018/19. The proposed changes are set out in Appendix 6.
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Purpose of Report
The report enables the Committee to consider and comment on the issues raised and actions being taken to address both budget pressures and performance issues as at 31st December 2023.
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This report makes the following recommendations to the Corporate Services Policy Advisory Committee:
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1. That the Revenue position as at the end of Quarter 3 for 2023/24, including the actions being taken or proposed to improve the position, where significant variances have been identified, be noted;
2. That the Capital position at the end of Quarter 3 for 2023/24 be noted;
3. That the Performance position as at Quarter 3 for 2023/24, including the actions being taken or proposed to improve the position, where significant issues have been identified, be noted.
4. That the UK Shared Prosperity Fund update, attached at Appendix 3 be noted.
5. That the Risk Update, attached at Appendix 4 be noted.
6. That the uncollectable Business Rates (NNDR) listed at Appendix 5 be approved for write-off by Cabinet.
7. That the Committee recommend Cabinet to approve the new contract approval levels as shown at Appendix 6. These changes will then need approval by Democracy and General Purposes Committee before final approval by Council.
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3rd Quarter Finance, Performance & Risk Monitoring Report 2023/24 |
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1. CROSS-CUTTING ISSUES AND IMPLICATIONS
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Issue |
Implications |
Sign-off |
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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.
The Key Performance Indicators and strategic actions are part of the Council’s overarching Strategic Plan 2019-45 and play an important role in the achievement of corporate objectives. They also cover a wide range of services and priority areas.
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Director of Finance, Resources and Business Improvement (Section 151 Officer) |
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Cross Cutting Objectives |
This report enables any links between performance and financial matters to be identified and addressed at an early stage, thereby reducing the risk of compromising the delivery of the Strategic Plan 2019-2045, including its cross-cutting objectives.
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Director of Finance, Resources and Business Improvement (Section 151 Officer) |
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Risk Management |
This is addressed in Section 5 of this report. |
Director of Finance, Resources and Business Improvement (Section 151 Officer) |
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Financial |
Financial implications are the focus of this report through high level budget monitoring. Budget monitoring ensures that services can react quickly enough 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.
Performance indicators and targets are closely linked to the allocation of resources and determining good value for money. The financial implications of any proposed changes are also identified and taken into account in the Council’s Medium-Term Financial Strategy and associated annual budget setting process. Performance issues are highlighted as part of the budget monitoring reporting process.
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Senior Finance Manager (Client) |
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Staffing |
The budget for staffing represents a significant proportion 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.
Having a clear set of performance targets enables staff outcomes/objectives to be set and effective action plans to be put in place.
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Director of Finance, Resources and Business Improvement (Section 151 Officer) |
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Legal |
The Council has a statutory obligation to maintain a balanced budget and the monitoring process enables the Committee to remain aware of issues and the process to be taken to maintain a balanced budget.
There is no statutory duty to report regularly on the Council’s performance. However, under Section 3 of the Local Government Act 1999 (as amended) a best value authority has a statutory duty to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness. One of the purposes of the Key Performance Indicators is to facilitate the improvement of the economy, efficiency and effectiveness of Council services. Regular reports on Council performance help to demonstrate best value and compliance with the statutory duty.
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Deputy Head of Legal |
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Information Governance |
The recommendations do not impact personal information (as defined in UK GDPR and Data Protection Act 2018) the Council processes. |
Policy and Information Team |
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Equalities |
There is no impact on Equalities as a result of the recommendations in this report. An EqIA would be carried out as part of a policy or service change, should one be identified.
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Equalities and Communities Officer |
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Public Health
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The performance recommendations will not negatively impact on population health or that of individuals. |
Senior Public Health Officer |
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Crime and Disorder |
There are no specific issues arising. |
Director of Finance, Resources and Business Improvement (Section 151 Officer)
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Procurement |
Performance Indicators and Strategic Milestones monitor any procurement needed to achieve the outcomes of the Strategic Plan.
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Director of Finance, Resources and Business Improvement (Section 151 Officer)
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Biodiversity and Climate Change |
Sufficient budget has been allocated for the Council's short to medium term financial commitment to addressing the biodiversity and climate issues stipulated in the Biodiversity and Climate Change Action Plan. |
Biodiversity and Climate Change Manager |
2. INTRODUCTION AND BACKGROUND
2.1 The Medium-Term Financial Strategy for 2023/24 to 2027/28 - including the budget for 2023/24 - was approved by full Council on 22nd February 2023. This report updates the Committee on how its services have performed over the last quarter with regard to revenue and capital expenditure against approved budgets.
2.2 This report also includes an update to the Committee on progress against its Key Performance Indicators (KPIs), and an updated covering corporate risks.
2.3 Attached at Appendix 1 is a report setting out the revenue and capital spending position at the Quarter 3 stage. Attached at Appendix 2 is a report setting out the position for the KPIs for the corresponding period. Attached at Appendix 3 is an update on progress against the Recovery & Renewal Plan and attached at Appendix 4 is a report providing an update on corporate risks, in response to the former Policy & Resources Committee’s previous request for regular updates on this subject. Attached at Appendix 5 are the details of the uncollectable Business Rates (NNDR) being requested for approval to write off. Appendix 6 are details of new contract approval levels for the Committee to consider.
3. REVENUE AND CAPITAL BUDGETS
3.1 The tables below summarise the overall position as at 31st December 2023. Further details and an explanation of the significant variances are shown in Appendix 1.
Revenue Budget
Capital Budget
4. PROCUREMENT LEVELS
4.1 Contract Approval Level - As part of the work of regularly reviewing procurement processes to ensure they remain fit for purpose and support the Council’s priorities two new policies and and one statement were discussed on 14th December 2022 at CS PAC and subsequently approved by Cabinet. These have subsequently been implemented as follows:
· Sustainable Procurement Policy
· Social Value Policy
· Modern Slavery Statement
4.2 As part of the continual review of procurement, and the underlying policies and processes which underpin the delivery of the service, it is proposed to update of the financial approval levels. This is to reflect a consistent approach across the procurement partnership, and to reflect the impact of inflation since the levels were originally set in 2018/19.
4.3 New approval levels are being recommended to streamline the procurement process for officers and the procurement team. Appendix 6 details the current and future approval levels. The changes can be summarised as :
· increasing the approval level at the high value from £75k to £100k
· on all levels reducing the seniority of the approval
· clarify the process at the lower end at under £10k.
· this process also encourages the use of e-tendering to maximise competitiveness of any procurement requests.
4.4 During financial year 2022-23 of the 27 MBC procurements, 15 were over the current MBC ITT threshold of £75k. Of these 15, 13 were valued at over £100k – which is the proposed new threshold for a mandatory ITT process.
4.5 The proposed new procurement thresholds reflect more accurately the operational procurement being undertaken at MBC. These new thresholds will be supported by a new digital approvals process, which will allow us greater oversight and transparency of all procurement over £5,000 within the organisation. This will provide us with the following benefits:
· Efficiency for procuring officers
· Efficiency for the procurement team
· Greater oversight and scrutiny of spend
· Aligned procurement processes and procedures across the procurement partnership.
4.6 These changes support procurement best practice and allow a consistent approach across the Procurement Partnership between Tunbridge Wells and Maidstone Borough Council. Note that the new approval levels will require a change to the Council’s constitution and will therefore now be considered by the Democracy and General Purposes Committee and by Council.
5. AVAILABLE OPTIONS
5.1 There are two matters for decision in this report. The Committee is asked to recommend the approval of the write off the uncollectable Business Rates and the new contract approval levels to Cabinet.
5.2 The Committee is asked to note the remaining parts of the report but may choose to comment.
6. PREFERRED OPTION AND REASONS FOR RECOMMENDATIONS
6.1 In considering the current position on the Revenue budget, the Capital Programme, and the KPIs at the end of December 2023, the Committee can choose to note this information or could choose to comment.
6.2 In the case of the decisions the Committee is asked to recommend these for approval by Cabinet.
6.3 The Committee is requested to note the remaining content of the report.
7. RISK
7.1 This report is presented for information only and has no direct risk management implications.
7.2 The Council produced a balanced budget for both revenue and capital income and expenditure for 2023/24. The budget is set against a continuing backdrop of limited resources and the continuation of a 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 the Cabinet the best opportunity to take actions to mitigate such risks.
7.3 Within
the adverse variance reported to the Housing, Health and Environment PAC is a
projected overspend close to £1 million in relation to the provision of
temporary accommodation. Expenditure in this area is unpredictable, and whilst
current projections are that this overspend can be mitigated substantially
through underspends elsewhere around the Council, this area of spend continues
to pose a very significant risk.
8. CONSULTATION RESULTS AND PREVIOUS COMMITTEE FEEDBACK
9. NEXT STEPS: COMMUNICATION AND IMPLEMENTATION OF THE DECISION
9.1 The Quarter 3 Budget & Performance Monitoring reports are being considered by the relevant Policy Advisory Committees during March 2024.
10. REPORT APPENDICES
· Appendix 1: Third Quarter Budget Monitoring 2023/24
· Appendix 2: Third Quarter Performance Monitoring 2023/24
· Appendix 3: UK Shared Prosperity Fund Update 2023/24
· Appendix 4: Risk Update 2023/24
· Appendix 5: Uncollectable Business Rates (NNDR)
· Appendix 6: New Contract Approval Levels
11. BACKGROUND PAPERS
None.