Agenda item

(Director of Resources) To consider the attached report (FPM-029-2016/17).

The Director of Resources presented the Quarterly Financial Monitoring report on the key areas of income and expenditure for the period covering 1 April 2016 to 31 December 2016. The reports were presented based on which directorate was responsible for delivering the services to which the budgets related and the budgets themselves were the Revised Estimate. The salaries monitoring data was presented as well as it represented a large proportion of the authorities expenditure and was an area where historically large under spends had been seen.

The Committee noted that the Salaries budget showed an underspend of £148,000 or 0.9%. Neighbourhoods showed the largest underspend of £64,000, which related mainly to Forward Planning and Grounds Maintenance and Resources showed an underspend of £59,000 which related to Revenues and Housing Benefits. The investment interest were a little lower than budgeted, which was partly due to a delay in the payment from Biffa for the loan and there was little speculation about when rates might go up and more about whether they would go lower still or even negative.

Within the Governance Directorate, Development Control income was continuing the recent upward trend with fees and charges £59,000 higher than the budget to date and pre-application charges in line with the updated position. The fees overall were £35,000 higher than expected and so it looked likely that the full year budget would be exceeded. Building Control income was £6,000 lower than the budgeted and income was £1,000 down. The revised position on the ring-fenced account was a lower in year deficit than originally predicted but there was a surplus from previous years to draw upon. There was a lot of scanning work required for Building Control files and it was proposed to use some of the accumulated surplus to finance this work over the next few years.

Within the Neighbourhoods Directorate, the Public Hire licence income and other licensing was above expectations, although the Public Hire figures included £27,000 relating to future years so in reality income relating to 2016/17 was £7,000 down. The income from MOT’s carried out by Fleet Operations was £9,000 below expectations and had been affected by the uncertainty around the relocation to Oakwood Hill, although had recovered slightly since the autumn. The account itself was budgeted to be in deficit by £40,000 due to the additional security costs at Oakwood Hill which were a temporary measure and should reduce accordingly. The Car Parking income was £14,000 below the estimate, however there was some income relating to this period that had been not received until February. The Local Land Charge income was £1,000 above expectations, although the budget had been reduced as there had been fewer searches undertaken. The actual for Recycling income was low when compared to expectations, although October credits expected in month 9 would not be received until January. In December 2016, the Cabinet agreed to some additional funding for the Waste Management contract and some of this expenditure was still due to be invoiced.

Within the Communities Directorate, expenditure and income relating to Bed and Breakfast placements had increased with the majority eligible for Housing Benefit. Whilst some of the costs would be reimbursed by the Department for Work and Pensions, it would be only around 50% which would leave a similar amount to be funded from the General Fund. Growth of £28,000 had been included in 2016/17 for the additional costs though this now looked insufficient.

The Housing Repairs Fund showed an underspend of £510,000 and there were underspends showing on both Planned Maintenance and Voids work. There was also a variance on HRA Special Services which related partly to grounds maintenance and sheltered units.

This was the fourth year of operation for the Business Rates Retention Scheme whereby a proportion of rates collected were retained by the Council. The two aspects that were monitored were changes in the rating list and the collection of cash.

The resources available from Business Rates for funding purposes were set in the January preceding the financial year in question and once these estimates were set the funding available for the year was fixed. Any variation arising from changes to the rating list or provision for appeals, would not affect until future years and for 2016/17 the funding retained by the authority after allowing for the Collection Fund deficit from 2015/16 was £3,435,000. This exceeded the government baseline of £3,050,000 by some £385,000 and the actual position for 2016/17 would not be determined until May 2017. The cash collection at the end of December was £27,901,642 and payments out were £25,910,238, meaning the Council was holding £1,991,404 of cash and so the Council’s overall cash position was benefitting from the effective collection of non-domestic rates.

There were three projects included on the Major Capital Schemes schedule which related to the House Building packages 1 and 2 and The Epping Forest Shopping Park.

In conclusion, the income was generally up on expectations and expenditure down. The increased income levels were very much welcomed from Development Control and the expenditure being below budget was not surprising as expenditure was usually heaviest towards the end of the financial year. The Committee were asked to note the position on both the revenue and capital budgets.

The Committee enquired whether there were any critical jobs vacancies with the Salaries underspend, particularly with regards to Forward Planning. The Director of Resources advised that there were not any critical jobs that were vacant, although most of the Forward Planning Team were consultants and this could change with the IR35 changes to employment.

Furthermore, the Committee was also very concerned with costs associated with the MOT’s carried out by the Fleet Operations and the addition costs that had been accumulated due to the security requirements. Councillor Mohindra asked that further information be reported to the Committee on what were the actual costs of additional security, what lessons had been learnt and would this be sufficient for the future requirements. Members felt that the MOT section now needed to start to break even and generate income for the Council going forward.

Resolved:

(1)          That the Quarterly Revenue and Capital Financial Monitoring Report for 1 October 2016 to 31 December 2016 be noted; and

(2)          That additional information on the security issues and costs associated at Oakwood Hill depot be reported back to Members.

Reasons for Decision:

To note the third quarter financial monitoring report for 2016/17.

Other Options Considered and Rejected:

No other options available.