The Director of Finance provided a summary in tabular format of the current position of the Authority revenue accounts and General Fund balances as at 31 July 2008.

The monitoring statement included the composition of the original 2008/2009 budget by department including agreed savings and policy options and at the request of the Committee (minute 6 (4 June 2008) refers), it included as an appendix details of agreed savings and efficiencies. The statement identified monitoring against the 2008/2009 budget including the financial implications of Cabinet decisions; anticipated variance against the original budget; and an explanation of variances and areas identified as requiring further attention. The monitoring statement was based upon the information provided within departmental financial monitoring reports and was updated and submitted to each meeting of this Committee.

The Director circulated an updated statement showing the financial position as at 31 August 2008 and he commented that at this stage of the financial year there were reports of financial pressures, viz: –

·  Adult Social Services continued to project a £3.5m overspend, with the Director having reported the position to the Cabinet on 4 September 2008 (minute 185 refers). The main concern was in relation to Community Care through the impact from 2007/2008, increasing demand and the inflation rises requested by providers.

·  Children & Young People were now projecting a £1.7m overspend – a reduction from the £3m at 31 July, through maximising grant opportunities. Financial pressures were essentially because of the implementation of prior year targets, issues in respect of employee savings targets and care costs for children through increasing demands. However, the Director continued to look at actions to further contain spend.

·  Treasury Management activities continued to be affected by the volatility of the financial market and close monitoring had resulted in increasing investment income and a reduced need for temporary borrowing. The projections were for a £1.2m underspend (up £0.3m from 31 July).

·  Pressures areas had been identified by Chief Officers as a consequence of challenging targets including care services but also energy costs and the achievement of income targets, particularly Children and Young People and Technical Services. A report on energy related costs was presented to Cabinet on 9 July 2008 (minute 131 refers) whilst the other areas were being monitored and, if necessary, would be the subject of reports to future meetings of the Cabinet.

Under the decisions made by the Cabinet, the Director commented that on the plus side were the Financial Out-turn for 2007/2008, which showed an increase of £2.5m in balances at 31 March 2008; the Insurance Fund review, which released £3m to balances; and the Government announcement on the Local Authority Business Growth Initiative Grant, which saw a £1.2m receipt. As a consequence, the projected balances at 31 March 2009 increased from £5m to £11.8m. The Cabinet had agreed to budgetary increases of £0.9m for energy and fuel – the July report having highlighted that the pressures could total £3.5m this year. Although the impact of the energy pressures, if realized, and the variations, if not contained, would see the balances reduce to £4.3m, this was an improvement on the position at 31 July as a result of the actions by Children and Young People and Treasury Management.

In response to a comment from a member with regard to fuel prices, the Director indicated that they had been calculated in July when oil prices were highest and prices were expected to have reduced when the contract was reviewed in the Autumn. In response to further comments, the Director proposed in future to report on an exception basis and to include in future reports a ‘traffic light’ indication.

Resolved – That the report be noted.