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  ...  view the full minutes text for item 74