Agenda item

To consider a report of the Borough Treasurer.

The Committee considered a joint report of the Director of Finance and Business Services and Head of Policy and Performance containing a summary and detailed information about the Council’s financial and non financial performance during the first quarter 2011/2012.

In summary, the quarter one position was as follows:

• Services were forecasting a £5.7 million against their budgets, after taking into account requests for fully funded supplementary revenue estimates
• Around £3.6 million of this figure could be mitigated by unallocated contingencies, capital financing under spend, and surplus grants.
• Services would seek to identify further remedial actions to address a net £2.1million budget shortfall.
• It was estimated that the general reserves at March 2012 would be approximately £18million
• There were risks that a substantial number of savings proposals included in the 2011-12 budget would not be fully achieved.
• The forecasted variance in capital programme of £18 million was largely explained by slippage, with costs being re-phased over future years.
• Debt was broadly in line with the position at the end of the 2010/2011 financial year
• 10 measures out of a basket of 10 from the retained former statutory indicators were performing on or above target.

Members of the Committee questioned the Director of Finance and Business services and Head of policy and Performance on the contents of the report and made the following recommendations.

RESOLVED –

(a)             That the committee believes that it is imperative that Cabinet takes early intervention measures to address the projected overspends highlighted in the quarter one budget report and accordingly, Cabinet be informed that whilst acknowledging that such early action will inevitably lead to pressures upon service delivery, the committee believes that Cabinet should be mindful to ensure that any remedial action taken to balance the budget should not have a negative impact on the quality of service offered to residents of Cheshire East and therefore, any actions taken now should include mitigating measures to avoid reductions in service.

(b)       That the committee has concerns about the projected reduction of car parking income of £227,000 which is attributed in the report to the current economic recessionary pressures and delays in tariff increase. The committee is also concerned about the projected reduction in income from fines of £213,000. The committee believes that this issue should be investigated as a matter of urgency to identify the underlying cause of the projected reduction in income and to investigate the anecdotal evidence that many car parks within the borough appear to have seen a dramatic decrease in use, whilst at the same time, on-street parking in town centres appears to have increased significantly.

(c)        That Cabinet be informed that this Committee is of the view that the importance of the asset challenge process cannot be overestimated, and accordingly, Cabinet should be encouraged to take measures to pursue this process with some vigour to ensure the Council maximises its potential to obtain capital receipts.

(d)       That the committee welcomes the option to capitalise up to £3million redundancy costs in 2011/12 but would not favour taking out external borrowing to fund this arrangement if at all possible.

(e)       That the committee regrets that performance information which is referred to in the last paragraph of section 1.5 of the report is not reported in full, although it is acknowledged that this information appears in the full cabinet report.

(f)         That the committee believes that the schemes listed at paragraphs 80 and 81, Queens Park Restoration and LTP Poynton Revitalisation Scheme have been treated in an inconsistent manner in that an overspend is envisaged in respect of transition works in the Poynton schemes and is deemed to be allowable, but any potential overspends in respect of Queens park are to be limited to only essential footpath work.

(g)       That the Director of Finance and Business services be requested to provide additional information about the Council’s policy in respect of interest accrued on any unspent 106 monies.

(h)        That the Director of Finance and Business services be requested to provide the committee with a fuller explanation of the enhancements paid to teachers relating to early retirement, pension and redundancy costs in paragraph 17 costing £2.3 million per annum.

(i)         That Director of Finance and Business services be requested to provide further analysis on the impact of inflation on budget setting for 2012/13.