Decision details


Decision Maker: Cabinet

Decision status: Recommendations Approved

Is Key decision?: Yes

Is subject to call in?: Yes


A report by the Interim Director of Finance set out the revenue position for 2012/13 as at Month 3 (June 2012).  It identified the latest financial projections and prioritised the risks for ongoing management actions, to ensure the year-end position would result in spend remaining within the budget allocated. 


The Cabinet was told that this report was the first in a new format and had been separated from any other information.  The Interim Director proposed to report monthly, therefore, reducing the time between reporting and remedial action.  The Revenue Monitor tracked progress against the agreed budget decisions, on a risk basis, and forecasted anticipated significant variances, to enable corrective action to be taken.


A view had been taken on the likely impact of ‘pressures’ and the consequences for the General Fund balances.  The concept of ‘pressures’ would be replaced by the more exact ‘overspend/underspend’ measures in the next monitor.  The Cabinet was informed that the aim in the forthcoming months was to expand the report to include the cumulative information as the year progressed, being built-up by the monthly reporting.  Appendix 1 to the report set out the timetable for reporting the revenue monitor during 2012/13.  A Capital Monitoring report would also be presented to the Cabinet on a monthly basis.


The report included proposals including Management actions, the institution of a spending freeze, as a matter of prudence and actions to deliver £7m of savings in 2012/13 in order that the General Fund balance was £4m.


The Cabinet had agreed the Performance Management arrangements for 2012/13 at its meeting on 29 March 2012. These included the quarterly Performance and Financial Review reports to the Cabinet which incorporated summary financial information with the appendices, which were placed in the Library, containing more detailed Financial Monitoring and Capital Monitoring reports.  All Members also received the monthly Financial Monitoring Statement which comprised a side of narrative and a side of more detailed information.  It was recommended that the revised arrangements replace those previously agreed by Cabinet.


It was noted that the projected revenue forecast for the year, at Month 3 (to 30 June 2012), showed a potential overspend of £17m on the General Fund which could be partially offset by the proposed actions set out in paragraph 2.18 of the report.  The Interim Director drew Members’ attention to the risk that the overspending may be higher, for it had been calculated by reference to individual budgets that may turn out to be unsound.  The Management Actions section of the report developed this matter further and, given these facts, it was proposed to institute a spending freeze, until there was a clearer view.

Councillor Phil Davies informed that the Council faced a big challenge over the next three years as it had to make £100m of savings and that the £17m potential overspending added to this problem.  Budget cuts had been imposed on the Council by the Government.  Also, the Council had failed to address fundamental issues.  Services had not been adjusted to match resources available.  Councillor Phil Davies welcomed the report as it highlighted the issues.  This was something that had not been done in the past. 


Members agreed that it was necessary to take urgent actions to address this overspend and the Council’s Administration and the Cabinet must take the lead on this.  Councillor Phil Davies proposed that Political Assistant support would no longer be provided to Political Groups and changes to Members’ support and the Council’s Scrutiny function would be made to make savings.




(1)  the Cabinet notes the following: That


(a)  at Month 3 (30 June 2012),  the full year forecast projects a potential General Fund overspend of £17m;


(b)  the Dedicated Schools Grant (DSG) funded activities will have no impact on the General Fund, as it is ring fenced to services funded by the DSG;


(c)  there are a number of risks and uncertainties that may impact adversely on the General Fund financial forecasts for the remainder of 2012/13;


(d)  Management actions have been identified to begin to recover the Departmental overspends (as detailed in Appendix 5 to the report);


(e)  a review of Earmarked Reserves be undertaken;


(f)  the General Fund balance is currently £14m and the projected overspends total £17m which will exhaust the balances should the overspends materialise. Earmarked reserves are currently £86.2m; and


(g)  the increase in the total budget is referred to full Council;


(2)  the Cabinet agrees to the following:


(a)  To institute a spending freeze on non critical expenditure until further notice;


(b)  That this format of revenue monitoring report be presented on a monthly basis to the Cabinet, it be made available to all Members of the Council, and it replaces the previously produced Financial Monitoring Statement; and


(c)  That actions be taken to taken to restore the general fund balance to £4m by implementing £7m of savings from those identified in Section 2.18 of the report, namely savings in the Members Support Service, the Finance Department savings for 2012/13 identified in July and the release of an Earmarked Reserve;




(3)  As the Council is facing significant financial challenges, both in-year and over the next three years;


As the Administration, we need to show leadership and demonstrate how we will also contribute to immediate savings, whilst ensuring that all Elected Members are equipped to deliver their roles with appropriate and integrated support;


Cabinet resolves: That


(a)  current arrangements for scrutiny support are revised to become a more integrated part of the Council’s management structure to provide advice and support for all political groups;


(b)  the Political Groups no longer be supported by Political Assistants funded by Council Tax payers and these posts be deleted accordingly with a view to realising savings in-year of up to £50k and a saving of £135k annually, which will be used to support front line services;


(c)  all Elected Members and the Administration are supported by a Central Policy Unit and Member Services, which will include a new casework management system, as part of the improvements in political leadership and governance; and


(d)  the Acting Director of Law, HR and Asset Management and Head of Human Resources and Organisational Development begin formal consultation with the staff directly affected by these proposals in accordance with the relevant Council policies.

Publication date: 12/09/2012

Date of decision: 06/09/2012

Decided at meeting: 06/09/2012 - Cabinet

Effective from: 20/09/2012

Accompanying Documents: