Agenda item

(To receive a report from Michelle Grady, Assistant Director – Strategic Finance which invites the Board to consider a report on Revenue Budget Monitoring, which is being presented to the Executive on 4 February 2020.  The views of the Board will be reported to the Executive as part of its consideration of this item)

During this item, Councillors C R Oxby and Mrs A M Newton declared that they had active/ on-going insurance claims with Lincolnshire County Council for damage to personal vehicles caused by potholes.

Consideration was given to a report by the Assistant Director – Strategic Finance, which invited the Board to consider a report on the Council's Revenue Budget Monitoring 2019/20, which was due to be considered by the Executive on 4 February 2020.

Members were advised that the report compared the Council's projected expenditure with the approved budget for 2019/20 and provided explanations for any significant over or under-spending.

Members were advised that the total revenue spending for 2019/20 was forecast to be £6.481m less than the total budget (excluding schools) and it was estimated that general reserves would be 3.5% of the total budget based on current spending. 

Member were referred to Table A for the Council's position on revenue budget monitoring as at 30 November 2019, with some of the key variances being highlighted as Readiness for Adult Life (Revised Budget £7.432m; Forecast Variance £1.097m) and Enablers and Support to Council Outcomes (Revised Budget £43.165m; Forecast Variance -£2.267m).

It was also highlighted that an underspend of £4.523m was forecast for the year on budgets that supported the cost of the capital programme in 2019/20, and there had been an underspend on the revenue contingency budget of £2m.

Members were then referred to Appendix A which detailed the monitoring of savings. 

Members considered the report and as part of the discussions the following points were noted:

·         The £1.303m overspend on insurance was largely due to increases in premiums which reflects insurance claims due to bad weather causing damage to the roads and claims for car damage from pot holes. Support was provided to services to manage insurance claims.

·         £0.810m of the £1.097m underspend on Readiness for Adult Life was due to the new supported accommodation for young people requiring housing support in Grantham and Gainsborough -. These homes have avoided the Council placing these young people in more expensive out of county provision. The budget had allowed for a one year transition between the two but staff were able to cope with the demand more quickly than anticipated so the money was not needed for the out of county costs.

·         The £0.104m underspend on the youth housing contract was due to not needing to draw on the additional funding earmarked from the 1% carry forward to support the contractor with temporary bed vacancies for young people at risk of homelessness and needing support. The additional funding was not required as occupancy levels had been between 95% and 100%.

·         The £2.267m underspend in Enablers and Support to Council Outcomes was due to a number of factors as set out in the report, some of which were legacy issues. It was anticipated that the Legal underspend would not be there next year as Legal Services had now gone through a rebasing exercise.

·         It was suggested that underspends could be re-used in-house by service areas rather than being allowed to accumulate. However, it was noted that if the underspends were moved to a new activity, then a political decision would be required. If the underspends were recurrent rather than a one-off, then the money could be used to fund other activities. Timely and accurate financial information would be required to enable virement in year, along with potential plans already in place to make a decision on. The new Development Fund would allow funding to be put into new activities.

·         The Board agreed that there was a need to be prudent and not take risks with the underspends as it was better to have a small underspend than a large overspend.

RESOLVED:

1.    That the Board support the recommendations to the Executive,     as set out in the report;

2.    That a summary of the comments made be passed on to the Executive in relation to this item.