Agenda item

Members received and considered the report of the Executive Directors on the Revenue Budget and Capital Programme Monitoring Quarter 2 2019/20.  The report contained details of the significant variations of the Revenue Budget and updated Capital Programme.

Since the last report to Cabinet, there had been two reportable virements.  The Council had provided an additional grant of £193,000 to the De La Warr Pavilion Charitable Trust to meet the pension shortfall and a staffing post had been transferred from the Resources to Housing and Community Service to improve operational efficiency.

Overall the cost of services identified a deficit of £1.2m which was 7.5% greater than the revised budget and represented an increase of £980,000 from the Quarter 1 2019/20 report.  Currently reserves were being used to support the Revenue Budget however this would not be sustainable long term.  The Council’s Rother 2020 programme envisaged delivering ongoing services based on savings and it was forecast in the financial plan that staff cuts would be required.  The Strategic Management Team would be reviewing all vacant posts and seeking expressions of interest for voluntary redundancies.  Costs of redundancies would be built into the Medium Term Financial Strategy and recovered within a year.

The main reasons for the variations were attributed to underspends / savings on employment related costs and staff vacancies.  The deficit was attributed to election costs, planning fee and land charges income, costs associated within the Acquisitions, Transformation and Regeneration and Resources Services, waste services, provision of temporary accommodation, replacement of faulty Leisure Centre equipment and cemeteries income.

Investment returns were in-line with the budget.  The final year end position would depend on treasury management and property investment decisions made between now and March 2020.  2019/20 Reserves were expected to meet £704,000 compared to the original budget assumption of £1.67m.  Due to the reduction of reserves it was recommended that the Council did not continue to provide grass cutting of £40,000 per annum to East Sussex County Council in 2020/21.

The Council Tax collection rate was forecast to be broadly in-line with the annual estimate and the Business Rates collection performance would be higher than the budget by £170,000.  Appendix B to the report, showed the Capital Programme for the period 2019/20 to 2024/25 which included £46,000 for upgrading Camber Car Park.

Capital spend to the end of September 2019 totalled £9.3m which included the purchase of Glovers House, Bexhill, as identified in Appendix A to the report.  The significant save of £300,000 on the works at the untarmacked car park at Camber, following a review of the projected costs, was highlighted.

It was noted that following the forthcoming Corporate Peer Challenge follow up visit from the Local Government Association, if considered appropriate, a peer review on finance may be requested.

RECOMMENDED: That the updated Capital Programme at Appendix B to the report, be approved.

AND

*RESOLVED: That

1)     the report and actions being undertaken by the Strategic Management Team to address the projected overspend be noted; and

2)     Council ceases to fund East Sussex County Council for additional grass cutting to highway verges from 2020/21.

*The RESOLVED parts of this minute are subject to the call-in procedure under Rule 16 of the Overview and Scrutiny Procedure Rules.