Skip navigation Home Page News and Events Help Complaints Legal Information Contact Us Top of Page

Agenda item

Quarter Two, 2018/19 Revenue and Capital Outturn

Joint Report of the Corporate Director of Regeneration and Local Services and the Corporate Director of Resources – Head of Finance and Transactional Services and Principal Accountant.

Minutes:

The Chairman introduced the Head of Finance and Transactional Services, Paul Darby and the Principal Accountant, Paul Raine who were in attendance to speak as regards the Quarter Two, 2018/19 Revenue and Capital Outturn (for copy see file of minutes).

 

The Head of Finance and Transactional Services thanked the Committee for the opportunity to speak, noting he would present the regular Quarter Two update, discuss issues that had been raised in terms of the reporting format, and provide some informal training as regards the information contained within the outturn report.

 

The Head of Finance and Transactional Services noted that the outturn reports presented at Overview and Scrutiny Committees gave an overview of the management of those accounts which related to the remit of that Committee.  It was explained that the cash limit set out the element of the budget that the Council could control, with the remainder being outside of the cash limit.  The Head of Finance and Transactional Services noted while there were a large number of areas outside of the cash limit, these were set out as a requirement of total cost accounting, including recharging and consumption of assets.  Members noted that it was Overview and Scrutiny role to look at those areas within the cash limit, and that the Council’s Audit Committee had responsibility in terms of all of the budget.  The Head of Finance and Transactional Services noted examples of services that recharged which included human resources, payroll and he added that as Resources had a lot of these sections that provided services for other departments and directorates then there was a recharge to each service.  He added this was an element for the Audit Committee to consider.

 

The Head of Finance and Transactional Services noted that in terms of Overview and Scrutiny, in looking at the cash limit there was the opportunity to hold budget managers to account as regards performance and to look at outcomes against the investments made and query underspends and overspends.

 

 

The Head of Finance and Transactional Services referred Members to the report setting out the position at Quarter Two, to the end of September 2018.  He explained that it included the forecast for the end of the year, and this would fluctuate and was effectively reset quarterly by Cabinet, as a result of drawn down, any additions or changes or/and one-off income or transfers.  Members noted an example given of Business Development was a grant may cover a number of years and the funds are earmarked and transferred and spent over a number of years.

 

The Committee were referred to paragraph 12 of the report which set out the controllable budget within the cash limit, with the position being positive in comparison to Quarter One.  It was explained that the reports to Overview and Scrutiny contained more granular detail, and each Overview and Scrutiny Committee had the same reporting style, based upon consultation with Members.  He added that if a change was sought to the reporting style then this would need to be looked at in the context of all of the Overview and Scrutiny Committees.  Members noted that when comparing the budget reports considered by Durham’s Overview and Scrutiny Committee with those from other Local Authorities, there was much more detail in Durham’s reports.  The Head of Finance and Transactional Services noted that indeed Members may feel there was too much detail within the reports, and that should that be the feeling then Officers could look again to reach the right balance.

 

It was explained that the subjective analysis was set out in line with the Accountancy Code of Practice and that from a total budget of £58.437 million, with a cash limit of £12.688 million.  Councillors noted the breakdown by service area and that Appendix 2 to the report set out the sums outside of the cash limit and it was explained that variances would be addressed by the Audit Committee.

 

The Head of Finance and Transactional Services noted that in considering the amount within the cash limit, Members were looking at the true position in order to hold budget managers to account.  He added that as the year continued through to Quarter Three the budget position would become clearer, and that it should be noted that in Quarter One, there would be a “light touch” as there would still be ongoing work in terms of the closing of the accounts from the previous financial year.

 

The Chairman thanked the Head of Finance and Transactional Services and asked Members of the Committee for their comments and questions.

 

Councillor P Howell asked as regards the final column in the table at paragraph 12 to the report, whether it was the position at the end of Quarter One or year end.  The Head of Finance and Transactional Services noted it was the forecast position for the year end, based upon the position at the end of Quarter One.  He added that there was the high level breakdown within that table, and more detailed breakdown by service area within Appendix 3.  He asked if the table and explanation as set out in the report was sufficient.

 

Councillor R Crute thanked the Head of Finance and Transactional Services for his work in terms of the reporting style and coming along to Committee to help explain the various elements.  He added he felt that the level of data contained within the report was sufficient and that rather it had been a lack of sufficient understanding. 

 

 

He thanked the Head of Finance and Transactional Services again for clarifying the report and agreed that the information that Overview and Scrutiny Committees had been receiving was sufficient, and any additional information was superfluous as those elements not being considered by Overview and Scrutiny would be addressed by the Audit Committee.  Councillor R Crute added he felt that a glossary of terms and formal training would be helpful.  He reminded Members of a previous training session that had not been well attended and added if Members felt it would be beneficial that he would speak with Overview and Scrutiny Officers in terms of arranging a bespoke training session and highlighted the importance, that if a training session is arranged that Members attend.  Councillor R Crute reminded Members of the difficulties of some other Local Authorities, including Northamptonshire, and the criticism of their Officers and Members in holding budgets to account.  The Chairman agreed and asked for opinions from other Members.  Councillor J Atkinson noted he felt that within the Overview and Scrutiny meetings the report should be as simple as possible to allow Members to digest the information.  He added he felt following the explanation from Officers today that the reports as previously considered by Committee were sufficient and that should Members require any additional information he felt Officers were more than happy to provide this if requested.

 

Councillor P Howell thanked the Officers for all their work in terms of clarification in respect of the budget reports.  He noted that his initial concern had been as regards having clarity in terms of both the overall budget and the cash limit, with that split being useful.  He added he felt there was no conflict with the Audit Committee in looking at the processes and noted the other Overview and Scrutiny Committees would look at other elements of the budget and that the task would be for the Economy and Enterprise Overview and Scrutiny Committee to look at the cash limit of £12.688 at Quarter Three and then at Quarter Four comparing like for like elements.  The Head of Finance and Transactional Services noted that as the other Overview and Scrutiny Committees considered other elements from the budget this was why figures were not changed in-year as this could confuse those elements reported to the other Committees.  Councillor P Howell noted he understood this, it was the apparent volatility of the budgets that had been an issue.

 

Councillor J Clare noted the role of Overview and Scrutiny in looking at budgets and noted the large adjustments that often took place in the final quarter, due to spending profiles.  He added that he understood as some concerns when looking at the large sums such as housing and economic development, however, the information as set out within Appendix 3 was where he felt the information came alive and this was the part that helped Members understand what was actually going on.  Councillor S Dunn noted he felt the new report was very clear, however, he would not wish any change to the information as set out in Appendix 3, agreeing that this was one of the more important sections in being able to understand what was happening within each service.

 

Councillor R Crute suggested that further discussions would be undertaken with relevant officers concerning the development of a training session for Overview and Scrutiny Members.

 

Mrs R Morris asked as regards the “light touch” for Quarter One and asked if this period was not one to have even more scrutiny.  The Head of Finance and Transactional Services clarified that light touch did not mean any less thorough, and that the process was that of a risk-based analysis. 

 

He added that as that time of year represented the period where the previous year’s accounts were being closed, that area would be receiving focus, however, the appropriate depth of work was carried out.  The Head of Finance and Transactional Services noted that the cash limits helped avoid a rush of spending each March and helped plan better for the medium-term.  Councillor P Howell noted he agreed with the Head of Finance and Transactional Services as regards the focus at Quarter One, with the close down of accounts.  He noted he was confident of Officers not taking their “eye off the ball” and agreed with Councillors in support of continuing to receive the information as set out within Appendix 3.  The Chairman explained that the views of Members would be taken on board and a training session arranged for a future date.

 

Councillor P Howell noted changes in figures and asked if they related to changing demands and also as regards a figure of £125,000 for inward investment brand development.  The Head of Finance and Transactional Services commented that this may relate to advertising that appeared in train stations promoting County Durham as a tourism destination and was not included in the base budget.

 

Resolved:       

 

(i)              That the Economy and Enterprise Overview and Scrutiny Committee note the report and presentation.

(ii)             That the view of the Economy and Enterprise Overview and Scrutiny Committee in terms of the report style and format be noted.

(iii)           That a training session for Overview and Scrutiny Members in relation to budget reporting be arranged for a future date, details to be circulated in due course.

Supporting documents:

 

Contacts
Democratic Services
Durham County Council
County Hall
Durham
County Durham
DH1 5UL
email:
Tel:
03000 269 714