Agenda item

(Director of Resources) To consider the attached report (FPM-026-2014/15).

The Director of Resources presented the Quarterly Financial Monitoring report for the period 1 April to December 2014, which provided a comparison between the original and revised budgets for the period ended 31 December 2014 and the actual expenditure or income. The report provided details of the revenue budgets for both the Continuing Services Budget and District Development Fund and the capital budgets, including details of major capital schemes.

The Cabinet Committee noted that the Salaries budget showed an underspend of £164,000 or 1.1%. The pay award had now been agreed and implemented from 1 January 2015 so the underspend would probably reduce going forward. Three of the five directorates were currently showing an underspend, the most significant in monetary terms being £77,000 in Governance which related mainly to the Estates Division; Resources showed an underspend of £75,000 which related to a number of areas the most significant being Revenues and the remaining variances were relatively insignificant. Investment interest levels in 2014/15 were slightly above expectations at quarter 3, due to an increase in surplus cash available for investment although there was still no clear indication when rates might improve.

Within the Governance Directorate, Development Control income was £82,000 higher than budgeted and pre-application charges were £16,000 higher. Building Control income was £18,000 higher than budgeted and the ring-fenced account was showing an in-year surplus of £18,000 resulting in a surplus of around £30,000 compared to the original budget, which had predicted a deficit of around £40,000.

Within the Neighbourhoods Directorate, the Hackney Carriage income was £2,000 above expectations and other licensing was in line with the budget. The income from MOT’s carried out by Fleet Operations was in line with the revised position. The Local Land Charge income was in line with revised expectations at the end of December but there was still significant uncertainty surrounding the future charging for these services which may or may not be resolved during the financial year. From the start of the new waste management contract recycling credits were paid only on dry recycling and at the end of December credits for November had been invoiced which was a marked improvement on the situation earlier in the year. The final payment to the previous Waste Management contractor was still under negotiation as there were some issues with vehicle damage at the end of the contract and payments to the new contractor were in line with expectations. Payments to the Leisure Management contractor were two months behind as expected.

Within the Communities Directorate, the Housing Repairs Fund was showing an underspend of £79,000, but the full year budget was likely to be fully spent.

The Director of Resources reported that this was the second year of operation for the Business Rates Retention Scheme whereby a proportion of rates collected were retained by the Council. At the end of December 2014 the decrease in the overall value of the rating list was a concern but cash collection was still going well and with the Council entering into an Essex Business rates pool from 2015/16 this would reduce the risk further.

There were two projects included on the Major Capital Schemes schedule relating to the Museum redevelopment and House Building programme. The House Building scheme was a concern because of the risk of having to repay the Government any unspent 1-4-1 Right to Buy capital receipts and the possible loss of some or all of the HCA Affordable Housing Grant.

In conclusion, the Director of Resources stated that with regard to revenue, income was up on expectations and was expenditure down. The increased income levels were very much welcome, and appeared to provide some evidence of the economic recovery. The expenditure being below budget was not surprising as expenditure was usually heaviest in the final quarter and the Council had experienced revenue underspends consistently over the last few years.

Councillor Stallan advised that the Assistant Director (Housing Property and Development) was aware of the tight timescale for the Housing Building programme and reassured the Cabinet Committee this would be monitored.

Resolved:

(1)          That the Quarterly Financial Monitoring Report for the period April to 31 December 2014 be noted. 

Reasons for Decision:

To note the third quarter financial monitoring report for 2014/15.

Other Options Considered and Rejected:

No other options were available.