Decision Maker: Performance and Finance Scrutiny Sub-Committee, Cabinet
Is Key decision?: Yes
Is subject to call in?: No
To note the Revenue and Capital forecast position as at Quarter 2
To approve virements
To approve increases in the capital programme delegated to Cabinet.
To note Revenue and Forecast position as at Q2 for the Concilium Business
The Sub-Committee received a report of the Director of Finance on the Council’s revenue and capital monitoring position as at Quarter 2 2016/17 as at 30 September 2016, which was due to be considered by Cabinet at its meeting on 8 December 2016.
Following an overview of the report by the Director of Finance, Members asked the following questions and received responses from the officer and Portfolio Holder:
Q - What was the reason for two items previously charged to the Housing Revenue Account now being charged to the General Rate Fund? (paragraph 2.30)
A – The expenditure was for a Social Worker focussing on families in social housing.
Q – A report on the Multi Agency Safeguarding Hub had been submitted at the beginning of the financial year so should the budget pressure have been foreseen?
A – In addition to funding for the known pressure, provision for growth had been built into the budget arising from an increased number of children in placements.
Q – There was already a £1.3m variation from the first two quarters for waste management. What action was being taken as a result of the failure to take into account the cost implications of incorrect assumptions including the take up of the brown bin service, reduction in recycling figures, fly tipping, and the rising cost of residual waste? Route optimisation had resulted in much less saving as residents had been opting in and out of the service and the technology had not been successful. Is the Director of Finance satisfied with the assumptions made by the Corporate Director Community and is a robust plan for waste in place? What was the involvement in the pricing of the service as Harrow had one of the highest charges for waste collection in the country?
A- Series of actions had been put into place to positively address the underlying financial pressures. There had been a cumulative reduction in the rate support grant for Harrow of 93% and contractor costs had risen. A business case, including prices based on different scenarios, had been agreed for garden waste prior to implementation and subsequent challenges required flexibility in the scheme. The current Director of Finance had not been in post when the original business case was done. 26,000 residents had signed up for the garden waste scheme which was approximately £500,000 down against income target. There was a need to improve forecasting particularly with regard to revenue and cost implications.
All new business cases were robustly challenged, including examination by the Commercialisation Board. All schemes were expected to generate value for contracts and customers, cover costs and make a maximum return on investment.
It was agreed that a Member receive a copy of the waste services business case and marketing strategy, to include documentation on pricing and possible take up.
The service was confident that improvements would be made for the next year such as direct debit payments, and reductions through route optimisation.
The Chair reported that the environment scrutiny leads had examined information regarding tonnage. A challenge panel could take place on the revised plans if necessary
Q – The previous Portfolio Holder for Finance and Major Contracts had expressed the opinion that provided the overall budget was in order he was relaxed about individual components so if a shortfall occurred in one area compensatory reductions would be made other areas or reserves would be drawn down. Does the current Portfolio Holder support this approach?
A – How service operation in the current year would affect the following year would be analysed, realistic income projections would be made for 2017/18 and plans made to generate new income in other areas
Q – Is it intended that the reductions to address the variance from £8.5m to £3.8m would not be reversed and if the situation continued where would the reserves be found?
A – The £8.5m arose from the huge demands on the council, about £11m growth and compensatory action taken elsewhere. Corporate items had been included for contingencies and this year some had been brought forward without use of core reserves.
Publication date: 11/01/2017
Date of decision: 07/12/2016
Decided at meeting: 07/12/2016 - Performance and Finance Scrutiny Sub-Committee