Agenda item

Joint Report of the Corporate Director of Regeneration and Economic Development and Corporate Director of Resources – Presented by Azhar Rafiq, Finance Manager, Resources.

The Chair introduced the Finance Manager, Resources, Azhar Rafiq who was in attendance to speak to Members in relation to the Forecast of Revenue Outturn, Quarter 2 2012/13 (for copy see file of minutes).

The Finance Manager noted that as usual, the areas reported upon would be the General Fund Revenue Account, the Housing Revenue Account (HRA) and the Capital Programme for the RED Service.  Members noted the service was reporting a cash limit underspend of approximately £700,000 for 2012/13 based on the Quarter 2 forecast outturn, the figure being £100,000 for the Quarter 1 forecast outturn.  Members noted the major underspends fell within Housing, Planning and Assets with the detailed explanations as set out within the report, together with those items identified as outside of the cash limit.  Councillors noted that the service grouping was on track to maintain spending within the cash limit and the estimated outturn position incorporated the Medium Term Financial Plan (MTFP) savings required for 2012/13.

The Committee noted that the HRA was on track, with the main items of note being overspends on repairs and maintenance in the Durham City area resulting from increased costs per void as a result of higher lettable standards and increased costs as a result of some specific gas boilers that were out of warranty.  Members noted underspends being achieved in other areas and also an overall surplus fo around £1m that could be utilised to support the capital programme, reducing the reliance on borrowing.

Councillors were reminded of the usual volatility reporting arrangements, noting improvements in the position regarding Planning Fees and concessionary fares.  It was added that the position as regards Building Control fees was still not being achieved with income below target and the previously mentioned housing repairs situation where expenditure was exceeding budget.

As regards the Capital Programme, the Finance Manager explained that the budget now stood at approximately £101 Million split between the General Fund (~£55.2 Million) and HRA (~£45.8 Million) with the early indications from project managers being that the outturn spend would be in line with the revised budget. It was stated that the first 6-7 months of the General Fund capital budget usually had a lower profile of  spend when compared to the later months of the financial year when things catch up.  

The Chair thanked the Finance Manager for his presentation, noted that there would be a report that would include issues regarding the Capital Budget at a meeting of the Committee in January 2013, and asked Members for their questions on the Quarter 2 2012/13 report.

Councillor M Wilkes asked whether the figure as set out in Appendix 3 regarding Durhamgate representing roughly a quarter of the General Fund capital spend was correct; why only £400,000 of funds for industrial estates had been spent, from a figure of £4.7 Million; and why only an amount equating to less that 20% of the budget for General Fund capital schemes appeared to have been spent and whether there were any surplus or uncommitted budgets available. 

The Finance Manager explained that the figures quoted in the report were correct and had come directly from the Councils financial management system. All the funds were allocated within the Capital Budget and that there was no “slush-fund”.  Members were reminded that some schemes operated over a period of several years unlike revenue budgets where spend is consistent from month to month and occurs in a consistent pattern over the course of the year.  It was added that for capital schemes, past experience had shown that often the highest spend was within the final quarter of the year. 

Councillor M Wilkes noted that he was concerned that if a further report was received in January, this would only leave 3 months until the end of the financial year for Members to be able to comment and also asked if there was a figure as regards the amount carried over from the previous years’ capital budget into the 2012/13 budget.  The Head of Economic Development and Housing, Sarah Robson explained that the spend profile within the capital budget was such that not every month had an equal spend, reiterating the Finance Manager as regards   to the major contracts and schemes to be finalised within the last few months of any financial year.  In response to this query, Members agreed that Quarter 3 forecast of Revenue Outturn 2012/13 should include the information on the Capital Programme and that this information would be shared at the earliest opportunity with the Committee, presenting the opportunity for Members to ask questions relating to the Capital Programme for Regeneration and Economic Development (RED). 

Councillor M Wilkes raised a concern as regards highways maintenance works that had not been completed, noting that he had been informed that this delay had been an issue with procurement, and queried whether now that winter weather was upon us would works be able to be completed in time or would further deterioration to the surface occur.  Councillor B Arthur noted that the severe rainfall and flooding had been cited as a reason for delays in completing some highways works.  Councillor P Stradling noted that outside of the cycle of meetings, Members could always speak to the relevant Portfolio Holder and/or Officers as regards any issues in relation to highways maintenance.

Resolved:    

That the report be noted.