Agenda item

Report of Chief Finance Officer and Senior Head of Corporate Development and Governance. 

Cabinet lead members:  Councillors Gill Mattock and Troy Tester.

(1) Performance be agreed.

(2) General fund,  housing revenue account and collection fund financial performance for the quarter ended September 2015 agreed.

(3) Transfer from reserves (strategic change fund) of £75k for payment to iESE agreed.

(4) Capital programme be agreed.

(5) Treasury management performance agreed.

42.1 Councillors Penny Di Cara and Tony Freebody addressed the cabinet.  Councillor Di Cara queried the household waste recycling performance figures, noting that quarter 2 performance showed a drop as compared with quarter 1, even though still ahead of the 35% target, and asked for a breakdown of the figures and, in particular, the composting percentages.  The senior head of community undertook to provide the information. Councillor Freebody highlighted the increase in the number of households in temporary accommodation, the rise in sickness absence, numbers of telephone calls and the number of calls answered at first point of contact.  The senior head of community advised that increased homelessness was a feature shared with other councils in the south-east due to welfare and benefit changes, rising rents and other related factors.  Regarding telephone call performance, the senior head referred to the on-going work implementing Future Model aimed at increasing the number of calls answered at first point and noted that revenues and benefits had now been brought back in-house with a consequent increase in the number of calls handled and also a reduction in call abandonment rate for this service from 10% to 1%.  The senior head of corporate development and governance advised that the poor sickness rate performance was primarily due to a number of cases of long term illness, all of which were unconnected, and that investigations had indicated there was no cause for concern.

42.2 Cabinet considered the report of the chief finance officer and senior head of corporate development and governance reviewing the council’s performance against corporate plan priority indicators and action targets; financial performance of general fund revenue expenditure, housing revenue account and capital programme and treasury management activities for the second quarter of 2015/16. 

42.3 Appendix 1 gave detailed information on non-financial performance indicators and highlighted those giving cause for concern as well as the best performing indicators at paragraphs 2.9 and 2.10.  In particular, the chairman highlighted a 20% increase in Bandstand patronage, completion of the new housing development at Coventry Court, and occupation of the first units at Pacific House at the Sovereign Harbour Innovation Park and the grant of planning permission for the Harbour’s new community centre.

42.4 Councillor Bannister drew the cabinet’s attention to the Tourism South East ‘Beautiful South Awards’; with Airbourne winning gold in the ‘Tourism Event of the Year’ category and Eastbourne’s tourist information centre winning silver as ‘Visitor Information Provider of the Year’.  Cabinet congratulated members of the teams responsible.

42.5 It was reported that the work on realigning the budgets for Future Model phase 2 was now complete and the department spilt was based on the current operating structure.  The general fund performance at the end of September showed a small variance of £183,000 on net expenditure (a movement of £187,000 compared to the position reported at the end of the first quarter in June).  Service expenditure (shown in appendix 2) had a favourable variance of £116,000 mainly as a result of salary savings pending recruitment to new FM structure (£69,000) and additional crematorium abatement income (£45,000).  The contingency fund currently stood at £134,000 which was available to fund inflationary increases and any future unforeseen one off areas of expenditure during the year.  The projected outturn showed a favourable variance of £165,000.  This was within 1.1% of the net budget and was within an acceptable tolerance level, however continued management of the position would be maintained to ensure that this final outturn position was achieved.  A transfer from the strategic change reserve of £75,000 was sought to meet the payment to iESE Limited for 2015/16.

42.6 Housing revenue account performance was currently above target by £107,000; mainly due to increase in rents from the number of void properties being at a lower level than budgeted for plus a quicker turnaround (£41,000), a reduction required for the provision for bad debts (£31,000) and the slow take up of the under occupation scheme (£36,000). Other small variances were carefully being monitored.  The favourable variances above were reflected in a forecasted outturn of £98,000.

42.7 The detailed capital programme was shown in appendix 3.  Actual expenditure was low compared to the budget, due to delays in the start dates of various major projects.  Expenditure was expected to increase as schemes progressed however spending patterns would be reviewed at quarter 3 and re-profiled into the 2016/17 year where appropriate.  The capital programme had been amended from that approved by cabinet in September to reflect new approved schemes.

42.8 Council tax collection was currently showing a £662,000 surplus; a variance of 1.21% of the total debit due for the year.  This was due to a combination of factors including better performance against the collection allowance within the council tax base and a reduction in the council tax reduction scheme caseload.

42.9 The business rates deficit of £1,712,000 was as a result of a bigger than anticipated provision made in 2014/15 for outstanding appeals, giving rise to a higher than budgeted for balance carried forward as at 1 April 2015, together with the extra number of appeals received by the valuation office which had not been included in the 2014/15 figures.  The total number of appeals outstanding as at 30 September 2015 was 248 with a total rateable value of £21.5m.  The deficit represented 5% of the total debit for the year.

42.10 The detailed mid-year review report on treasury management had been submitted to the council’s audit and governance committee on 2 December 2015 in compliance with CIPFA’s Code of Practice for Treasury Management.  A summary of the main points from the current economic background, interest rate forecasts, investment and borrowing performance was given in the report.  Treasury management performance was on target and all activities were within the approved treasury and prudential limits. 

42.11 Resolved (key decision): (1) That performance against national and local performance indicators and actions from the 2010/15 corporate plan (2014 refresh) be agreed.

(2) That the general fund,  housing revenue account and collection fund financial performance for the quarter ended September 2015, as set out in sections 3, 4 and 6 of the report, be agreed.

(3) That the transfer from the strategic change reserve, as set out in paragraph 3.5 of the report, be agreed.

(4) That the capital programme, as set out in appendix 3 to the report, be agreed.

(5) That the treasury management performance, as set out in section 7 of the report, be agreed.