Agenda item

The Committee considered a joint report of the Corporate Director of Resources and the Corporate Director of Neighbourhoods and Climate Change which provided details of the outturn positions for the service area, highlighting major variances in comparison with the budget (for copy of reports see file of minutes).

Presenting the report for the final quarter of 2023/24, the Finance Manager, Phil Curran, informed the Committee that Neighbourhoods and Climate Change reported a forecast cash limit underspend of £0.451million against a budget of approximately £124million. Culture, Sport and Tourism had an overspend of approximately £0.480million.

The Committee noted that the outturn took account of inflation related items which were treated as outside the cash limit.

The report included a breakdown of the revenue position across Head of Service areas and reasons for variances were detailed in Appendix 3 of the report.  After taking the latest outturn position into account, the cash limit reserve carried forward for Neighbourhoods and Climate Change was £0.540million which provided flexibility to deal with unbudgeted expenditure.  The outturn also took account of a contribution to earmarked reserves to fund future service initiatives. Culture, Sport and Tourism had a net draw down of reserves of approximately £2.3million. The capital budget for Neighbourhoods and Climate Change was £56.6million and expenditure against that budget was £47.5million. Culture, Sport and Tourism’s revised capital budget was £24.7million, with expenditure of £23.7million. 

The Chair thanked the Finance Manager for the report and the following questions were asked of the Finance Manager.

Councillor Adam referred to Appendix 3 which indicated a high proportion of underspend was due to staff vacancies and he asked whether deliberate decisions were being taken to carry vacant posts and, how the impact of vacant posts on levels of service was monitored. The Finance Manager clarified that services may take decisions to carry vacant posts, when future MTFP savings were anticipated. In some circumstances, vacant posts were the result of recruitment issues and agency staff may be utilised. He added that all services monitored the impact of vacant posts on performance and HR worked with services to improve recruitment processes, including the use of social media. The Chair highlighted that the issue of skills shortages in some sectors was becoming a common theme and it was clear that this was a local and national issue.

Councillor Adam also noted that Appendix 3 stated that Clean and Green had over-achieved income through Area Action Partnership (AAP) work. The Finance Manager explained that was due to an exceptionally high number of schemes in the quarter and he clarified that some of the additional income would be offset by additional costs in other areas of Clean and Green.

Moving on to present the forecast of revenue and capital outturn for the first quarter of 2024/25, it was reported that the Neighbourhoods and Climate Change forecast an overspend of £0.211million against a revised budget of £117.4million. Culture, Sport and Tourism was forecasting an overspend of £1.38million against a budget of £16.803million. The outturn took account of inflation related items and the report included a breakdown by Head of Service areas and reasons for variances.

The Finance Manager drew the Committee’s attention to paragraph 12 of the report which provided details of £0.374million underachieved car parking income at Noses Point and Crimdon due partly to delays in the implementation of the new charging regime linked to MTFP(14) savings. 

After taking account of the revenue overspend, the cash limit position for Neighbourhoods and Climate Change was £0.359million which provided some scope to deal with unbudgeted expenditure. The capital budget for Neighbourhoods and Climate Change was almost £80million at the end of quarter, with expenditure of only £3.6million as it was expected that the majority of the capital budget would be spent during the course of the year.  The key areas of spend to date were strategic highways and low carbon schemes.    

Questions were then invited on the quarter one report.

Councillor Nicholls echoed concerns with regard to underspends due to staff vacancies, and he referred to Appendix 3 which stated the Community Action Team was £32,000 under in staffing, due to moderated posts and he asked what was meant by the term moderated posts. The Finance Manager clarified that the term was used when the budget was set to accommodate future increment increases associated with career graded posts.

Resolved:

The Environment and Sustainable Communities Overview and Scrutiny Committee noted the information provided in the reports and commented accordingly.