Agenda item

Report by the Head of Resources to the Strategy and Resources Committee held on 3^rd February 2020 (attached).

(a)  Minute Extract of the Strategy and Resources Committee held on 3^rd February 2020 (attached).

The Committee considered a report to the Strategy and Resources on 3^rd February 2020 Committee by the Head of Resources together with a minute extract (circulated previously) regarding the Performance and Financial Management Quarter 3 of 2019/20.

The Accountancy Services Manager highlighted the following:

·         As at 31^st December 2019, the latest forecast net expenditure was £12,512,000, which produced a forecast budget surplus of £6,000. For quarter 2 there was a forecast budget deficit of £87,000, details of which were shown in Appendix A of the report – Variations in the Revenue Budget. The main variances supporting the £93,000 positive movement from quarter two to quarter three included savings within Temporary Accommodation and ICT Software and Devon WAN contract.

·         The original budget for 2019/20 included a forecast to achieve £239,000 worth of salary vacancy savings. This was reduced to £214,000 as a result of a virement in respect of the redesign of the salary pay structure. The current position forecasts that would be

exceeded by £17,000.

·         A review of procedures and processes within Works and Recycling was carried out at quarter two and the Council set targeted spend in respect of the vehicle workshop, challenging resources across all Works and Recycling manual sections and to reduce sickness levels. As a result of these changes the Council factored in a reduction in overtime and agency costs within the quarter 2 projections. The current figures indicated that these targeted reductions were being achieved, although it would continue to be closely monitored until the end of the financial year.

·         The sale of recyclable material continued to be an uncontrollable variable where the Council had recently seen a reduction to zero for glass and cardboard, although the sale price of plastic had increased significantly. The continued volatility remained a risk on-going and would be monitored closely.

·         At the 31st December 2019, the Council was still assuming a £200,000 increase to business rates growth already factored into the budget, the growth was now estimated to be £1,702,000.

·         Appendix B – “Movement in reserves and balances” detailed the movements to and from earmarked reserves in 2019/20.

·         Appendix C – “Strategic Contingency Reserve” detailed the Strategic Contingency Reserve movements and commitments.

·         Appendix D – “Capital Programme”. The Budget and Financial Framework report to Executive 4th February 2019 outlined the Capital Programme for the 2019/20 financial year of £9,609,022.

·         Variations of £908,967 were proposed to the 2019/20 Capital Programme as detailed in paragraph 4.4.3 of the report.

·         Variations of £528,428 were proposed to the 2020/21 Capital Programme as detailed in paragraph 4.4.4 of the report.

·         Variations of £171,413 were proposed to the 2021/22 Capital Programme as detailed in paragraph 4.4.5 of the report.

·         The revised Capital Programme for 2019/20 taking into account the budget variations was £8,102,276.

·         Actual spend on the 2019/20 Capital Programme, as at 31st December 2019 was £3,795,934.

·         The overall Capital Programme for 2019/20 to 2021/22 was £31,275,809.

·         The Programme of £31,275,809 was funded by Capital Receipts (£14,082,815), External Grants and Contributions (£14,618,838) and Reserves (£2,574,156).

·         Once funds had been included in the Capital Programme the Constitution required a separate decision to release those funds. Accordingly the HGV ramp scheme needed the funds to be released so that spending can start within the following three months.

·         Treasury Management and Debt Management as detailed in paragraphs 4.5 and 4.6 of the report.

In response to a question regarding significant costs in Waste and Recycling, the Head of Resources advised that the quarter 2 overspends related to manpower and vehicle costs. He explained that the quarter 3 position was slightly better than the original targets that were set. However, the service was still overspending but this had levelled out and was being controlled at an acceptable level.

In response to a question regarding an increase in tax revenue as a result of business rates, the Head of Resources advised that if businesses were to expand then the amount of business rates would increase and the Council would benefit from a percentage of that growth.

The Committee noted a typographical error within recommendation 2.6 of the report, which referred to “Executive” rather than “Members”.

RESOLVED, that the decisions and recommendations of the Strategy and Resources Committee be endorsed.