Agenda item

The Committee considered a report of the Neighbourhood Services Management Team which set out details of the forecast outturn as at Quarter 2 for 2015/16 and highlighted variances against revenue and capital budgets for Neighbourhood Services and the Finance Manager, Neighbourhoods, gave a presentation (for copies see file of minutes).

Councillor Armstrong sought clarification on the reasons for the underspend in Direct Services department and was this as a result of the profits made from members’ schemes and would these monies be put back into the Medium Term Financial Plan.

The Officer responded that profits would go into the Medium Term Financial Plan and any surplus monies would get carried forward or used in other areas.

Members were also advised that there was a much higher level of turnover than anticipated which added to the surplus. Going forward they may consider reducing the rates but they could not reduce too far in case there was a loss, which would become a drain on the budget.

Councillor Morrison referred to the £900K overspend on culture and sport and sought clarification on this. The Officer responded that the overspend was largely due to additional items of one off expenditure for improvements to the Gala Theatre and Town Hall. There was also an overspend on premises costs, and NNDR costs.

Councillor E Bell referred to building services charges and what would be the methodology for increasing charges. Officers responded that these were likely to decrease and was not a public charge it was an internal charge. The larger than anticipated volume of work being generated for the council’s internal DLO requires changes to be made to the profit markup which will probably result in reduced charging rates.

Councillor May referred to the recent reductions in fuel costs and the introduction of the national living wage and if this had impacted on the Council. The Officer stated that lower energy costs have been built into the Medium Term Financial Plan and resulted in lower costs generally in Direct Services. The introduction of the national living wage mainly impacts on jobs in the transport and social care sectors rather than Neighbourhood Services budgets.

Officers responded that the reduction in energy costs had been built into the reduction in budgets to reflect this. The underspend was now over and above this and there had been a review undertaken of the impact of the higher wages.

Councillor Adam indicated that he was pleased to see that building services would be reducing their charges.

Councillor Hall referred to the charges for projects and indicated that the design charges were expensive.

Councillor Armstrong responded that members needed a design service for projects and this service had overheads but the profits would be put back into the Medium Term Financial Plan.

Councillor Clare referred to the cost to have an area of land tarmacked in his area, which locals indicated was too expensive but when they saw the project complete they indicated that it was worth every penny, as it was done to a high standard. He then referred to the £900,000 extra profits and sought clarification on the original target. The Councillor was advised that the original target was £300,00 on a budgeted turnover of £12m. The actual turnover achieved was £19m resulting in an additional £900,000 profit.

Resolved: That the report be noted.