Decision details

(Time: 4.18pm to 5.02pm)

The Executive received and considered report 33/09 of the Head of Finance which detailed the revenue budget outturn for 2008/09. 

The Executive reviewed the report in detail, concentrating on significant variances from the budget approved by Council in February 2008.  Throughout 2008/09 the monthly budget monitoring reports had indicated that the Council would over spend against its original budget.  The main reason was a consequence of the economic downturn and the fall in a number of income streams (car park income, planning fees and land charges fees).  There was also an increased take up of free bus travel, adding costs for the Council.  Action was taken in January 2009 to stop any non-essential expenditure and to hold open any vacant posts.  The result was an overspend of £443,952.  Off-setting this was income of £792,168, consisting of new grant from the Government and reclaimed VAT on car parking excess charges.  As a consequence, the use of funds balances was £317,430 higher than budgeted.  Instead of having to borrow £311,940 from balances as originally predicted, the Council was able to replenish balances by £5,490. 

The Executive queried the reasons for cost centre variances, as provided by budget managers.  Members cited many examples where the reasons were inadequate.  The reasons must be clear so that Executive and Scrutiny Committee Members and the public could understand the report.  While the Chief Accountant answered some Member questions, it was considered that fuller responses should be sought from the Heads of Service.  The Executive Portfolio Holder for Finance was asked to review the reasons given with the Chief Accountant.  A revised appendix should then be prepared for the Scrutiny Committee which would also be considering the same report in August. 

The Executive considered that better financial monitoring was needed.  In particular, Heads of Service should review budget variances with their Portfolio Holder, who should agree the reasons for variances before submission to the Executive and the Scrutiny Committee. 

RESOLVED

(a)       that the overall revenue budget outturn position for 2008/09 and the outturn of individual service areas and cost centres be noted;

(b)       that a revised appendix B to report 33/09 be prepared for the Scrutiny Committee meeting on 20 August 2009 to include clearer reasons for variances;

(c)        that in future, Heads of Service be requested to review budget variances with their Portfolio Holder and agree with them the reasons for variances before submission to the Executive and the Scrutiny Committee; and

(d)       that the impact of the outturn position be taken into account in the integrated service and financial planning process when setting the 2010/11 original budget.