Agenda item

Budget Monitoring (Quarter 3)

To consider the report of the Chief Finance Officer.


The Interim Principal Accountant (SR) presented the Budget Monitoring report for Quarter 3, which advised Members of the material differences, by management unit, between the 2018/19 approved budget and the current outturn forecast in respect of Place Scrutiny Committee revenue and capital budgets.  The net expenditure for the Committee would increase from the revised budget by £162,250, after transfers from reserves, and included supplementary budgets of £1,055,800, which had already been agreed by Council, and included £300,000 for a review of the Bus Station site options. This represented a variation of 1.55% from the revised budget.The Interim Principal Accountant explained that the apparent overspend by Planning Services is more than offset by the available transfers from the Community Infrastructure Levy (CIL) and New Homes Bonus (NHB) earmarked reserves,  as set out in the Appendix.


It was also noted that the report included a predicted outturn update in respect of the Place Capital Programme, with a total current spend of £3,703,018 in 2018/19 with £31,950 of the programme potentially deferred until 2019/20.


In response to questions from Members, the Director (DB) explained that:-


·         a review of the Materials Reclamation Facility (MRF) would be carried out.  Staff worked hard to keep the machinery running at the MRF, but regular breakdowns of the machinery, some of which were over 20 years old, had resulted in the need for recyclable material being processed elsewhere, with additional costs to cover the gate fee (tipping fee) levied by other MRF facilities. In addition, finer grade material could not be processed at Exeter’s MRF due to the coarse nature of the machinery, this again has to be sent to a secondary reprocessor.  He advised that a review would also look at opportunities to expand the materials processed for generating additional income. It should be noted that changes to any aspect of waste collection would have an impact on many different aspects of the service such as vehicle requirements, as well as equipment required for the MRF. The financial modelling of these options is extremely complex.  The impact of such identifiable costs would be included in the report to a future meeting of this Scrutiny Committee.


A Member welcomed the points raised by the Director and suggested a further site visit to the MRF with an opportunity for informal discussion by Members of the Committee to ensure a better understanding of the issues relating to the site. Further investment in the MRF would ensure greater income and he supported any future business case. The Chair asked for the Democratic Services Officer to liaise with the Director and the MRF Manager to find suitable dates for a site visit.


A Member also referred to his role as the Chairman of the Exeter Tidy Group, and despite previous visits to the site, it appeared that little had changed in the intervening period. He had raised a question on this matter at the last meeting of this Scrutiny Committee and he hoped that the report by the Director (DB) would be presented as soon as possible.


The Interim Principal Accountant explained in response to questions from Members:-


·         the forecast £50,000 additional parking service costs included the additional signage costs arising from two tariff changes, among other maintenance and supplies costs;

·        in greater detail, the apparent overspend in relation to the Planning Services budget which was included in Section 8 of the circulated report. The CIL grants and Growth Point payments which are included in this service’s figures are funded from CIL and NHB, distorting the true results of Planning Services, Building Control and Land Charges, which is forecast to be an underspend of £105,000. The way in which this information was presented would change from 1 April and offer greater transparency.

·         Information in Appendix 3, set out the budgetary risk for some of the service areas.  Planning Services was included in this report due the possibility of unbudgeted costs arising for reasons outside of the service’s control. The inclusion of the Planning Service in this appendix does not indicate that it is expected to overspend against its budget; indeed, it is expected to underspend.  The revenue from recycling was included as a risk due to the intrinsic uncertainty of recycling rates and market prices for recyclates, and the availability of the MRF to process the recycling.


A Member referred to the Council’s approach to planning appeals which included the need for external consultants and he asked whether the City Council would consider employing a planning solicitor again. The Interim Principal Accountant stated that the amount spent on consultancy fees was a management issue, and the duties of the Treasury team were to monitor and report on the financial aspects to both Members and the Senior Management Board.  A Member added that the recent Member’s Briefing on Procurement by the Service Lead – Commercial and Procurement had been useful in informing Members about this newly formed team. Their role included monitoring the Council’s performance against any contract, service or supplier to ensure that value for money was achieved.


Place Scrutiny Committee noted the report.


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