Agenda item

(To receive a report from the Executive Director Finance and Public Protection, which describes the Council's financial performance in 2016/17 and makes proposals on the carry forward of over and under spendings into the current financial year)

That the Executive:

(1) Note the carry forwards set out in paragraph 1.83 of the report, which are

made in line with the Council's Financial Regulations;

(2) Recommends to full Council that the proposals in paragraph 1.84 of the

report relating to the treatment of underspends in excess of 1.0% be

approved;

(3) Note the transfers to and from reserves carried out in 2016/17 as set out in

Table D; and

(4) Note financial performance in 2016/17 including Flexible Use of Capital Receipts and the Prudential Indicators.

Consideration was given to a report from Pete More, Executive Director Finance and Public Protection, which:-

·         explained the Council's financial performance in 2016/17;

·         identified and explained variances from the Council's revenue and capital budgets;

·         advised on the use of flexible capital receipts to fund revenue expenditure on transformation during 2016/17;

·         made proposals on the carry forward of over and under spendings into the current financial year; and

·         reported Prudential and Financial Performance Indicators for 2016/17.

In guiding the Executive through the report, Tony Warnock, Operations and Financial Advice Manager made reference to:-

·         the key financial performance measures detailed in Table A.  It was highlighted that all were in line with expectations, with the exception of line 7, which related to payroll;

·         Details relating to the revenue budget outturn for 2016/17, as detailed at paragraph 1.22 of the report; and

·         The revenue budget final outturn position for 2016/17 as shown in Table B.  It was noted that the Council had an overall underspend of £45.944m.  The underspend was detailed on pages 13 to 21 of the report.

The Chairman of the Overview and Scrutiny Management Board (OSMB) advised the Executive that the OSMB had considered the Review of Financial Performance 2016/17; and had supported the recommendations contained in the report.

Comments raised by the Board in relation to under and over spends included:-

·         Readiness for Adult Life – Some concern was expressed as to what the options were for meeting the growing demands of care leavers and homeless 16-17 year olds;

·         Children are Safe and Healthy – Some concern was expressed regarding staffing vacancies in early help teams;

·         Adult Care – One area the Board had felt would be useful was to have a link between expenditure and activity to see what the impact of activity was on spending; and the impact the lateness of MOSAIC was having on staff;

·         Winter maintenance – The Board had supported the winter maintenance underspend;

·         Schools – The Board had raised some concern that there was £12.683m underspend in schools budgets and how this compared to schools budgets nationally.  Officers confirmed that any underspend had to go back to maintained schools.  It was noted further that schools were advised to hold some reserves to provide some flexibility as their budget was driven by pupil numbers.  It was confirmed the level of reserves for Academies was likely to start decreasing due to the cessation of the Local Authority Central Spend Equivalent Grant, once the transition protection had ended.  One member enquired as to whether Schools information in Table B could be presented in a different way so that the overall picture was shown.

Other concerns raised included the underspend pertaining to legal services; and whether the service provided was good value for money.  It was noted that the amount reflected an underspend on staffing and the overachievement of income against budgeted forecasts.  It was noted further that the overachievement income would be distributed out to partners, based on the amount of work put through the service.

A further point raised was that staff generally were not seeking legal advice early enough in the process, which was then resulting in more time being required on some projects, in some instances.  It was noted that as a result of a lack of legal specialists particularly in highways and property delays with projects were occurring.  It was noted further that in some areas the service excelled; particular reference was made to child care law.

Officers advised that the service had problems recruiting and retaining staff; and as a result the service was now looking into 'growing their own' and that option was currently work in progress. 

It was noted that a review of the service was planned.

The Operations and Financial Advice Manager continued to present the report and highlighted the Council's policy relating to the carrying forwards of over and under spendings; details were provided on page 25 of the report, and details of how the 1% carry forwards would be utilised was set out in Appendix B.  

Paragraph 1.84 provided details of other allocations of amounts resulting from overspends and underspends which were above 1%; and also provided information relating to the creation of new reserves.

Reference was made to Appendix A which provided information concerning the flexible use of capital receipts outcomes for 2016/17; Appendix B which detailed how the carry forwards of 1% would be utilised; and Appendix C which provided details of Prudential Indicators actual compared to estimated 2016/17.

The Chairman of the Overview and Scrutiny Management Board confirmed that the allocation of carry forwards had been supported by the Board.  That the Board had accepted the proposed allocations of carry forwards as set out in paragraph 1.84. 

Other comments raised from the Board included:-

·         That it would be useful going forward to have more narrative about the business case for each of the carry forward proposals;

·         Support was given to the Highways Advanced Design Reserve as it was felt that it was important to have schemes ready to go for when funding became available;

·         Support was given to the Horncastle Salt Barn Reserve, especially in light of the savings from the winter maintenance budget; and

·         A suggestion was made for some staff to have two computer screens to improve their productivity

It was agreed that staff needed to be issued with the right equipment in order for them to fulfil their role.  It was highlighted that it was necessary to ensure that the technology was the best available; and was forward thinking enough for the Council to provide services in the most efficient and effective manner.

In conclusion, it was agreed that the recommendations as presented would go forward to the Council meeting on 12 July 2017; and thanks were extended to the Overview and Scrutiny Management Board for their scrutiny input.

That the Executive:

1.    Note the carry forwards set out in paragraph 1.83 of the report, which are made in line with the Council's Financial Regulations;

2.    Recommends to full Council that the proposals in paragraph 1.84 of the report relating to the treatment of underspends in excess of 1.0% be approved;

3.    Note the transfers to and from reserves carried out in 2016/17 as set out in Table D; and

4.    Note financial performance in 2016/17 including Flexible Use of Capital Receipts and the Prudential Indicators.