Agenda item

Revenue and Capital Monitoring for Quarter 1 as at 30 June 2013

Report of the Director of Finance and Assurance.

Decision:

RESOLVED: That

(1) the revenue and capital forecast outturn position at the end of June 2013 be noted;

(2) the both the Revenue and Capital virements detailed in paragraphs 12, 15, 16, 17 and 24 of the report be approved.

Reason for Decision: To present the forecast financial position and actions required to be taken.

Alternative Options Considered and Rejected: As set out in the report.

Conflict of Interest relating to the matter declared by Cabinet Member / Dispensation Granted: None.

Minutes:

Cabinet received a report of the Director of Finance and Assurance, which set out the Council’s revenue and capital monitoring position as at 30 June 2013, including the actions required to manage overspend. The Director of Finance and Assurance informed Cabinet that the report included a detailed breakdown of the financial position by Directorates together with the performance against a number of savings as part of the Medium Term Financial Strategy (MTFS) agreed in February 2013.

A non-voting non-Executive Cabinet Member commented that the previous administration had attached a great deal of blame to the government because of the cuts it had imposed on local government. However, the Council needed to appreciate that it was facing tough financial decisions and he was amazed to note the overspend and shortfall across various budgets / Directorates. He stressed that tough times required tough decisions in the management of public money; otherwise contemptible decisions such as the removal of dog bins and keeping park gates unlocked would arise thereby making Harrow an unattractive place to live in. He asked what measures were being taken to mitigate the overspend, including those where the decisions had been reversed.

The Chief Executive responded as follows:

· the Council was facing a future which would require significant amount of savings to be achieved and that the Council was not complacent in this regard;

· future savings would become more difficult to achieve and therefore self awareness and corrective actions had been put in place;

· he was confident that a balanced budget would be achieved at the end of the financial year and that he could not recall a time when this had not happened. Good financial management was at the core of the Council’s business.

A non-voting non-Executive Member referred to the overspend on the PRISM project, which she categorised as poor decision-making. She congratulated the Chief Executive for curtailing the project, which had been damaging to staff who had devoted their careers to the Council. She noted that the overspend of £1m on this project was unavoidable.

The same Member referred to other poor decisions and overspends, such as the IT project and shared Legal Practice, including an overspend on staffing in the Procurement Service. She would have expected the Procurement Service to have come in on budget.

The Portfolio Holder for Community and Cultural Services and Housing gave prominence to those budgets that were underspent, such as the Housing Revenue Account (HRA) capital programme and the £150m which had been directed to the provision of affordable housing. He added that his administration was exploring measures that would keep Harrow clean and tidy.

A non-voting non-Executive Member expressed concern over the overspend in respect of the outsourcing of Harrow’s library and leisure services and sought clarity on the driver behind an overspend of £380,000. In response, the Portfolio Holder for Community and Cultural Services and the Deputy Leader suggested that the rollover of the decision by the previous administration together with the eventual delay in the decision as a result of the changes in administration had contributed to the overspend.