The Cabinet considered the report of the Interim Director of Finance setting out the revenue position for 2012/13 as at Month 5 (August 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 report indicated that Cabinet on 6 September 2012 instituted a spending freeze in the light of the projected overspend. An overview of the first two weeks of the freeze was detailed within the recommended outcomes appended to the report along with a review of the process.

Councillor Phil Davies indicated that it was clear that the Council had to reduce the overspend and that the current spending freeze was a responsible action, he also stressed importance of the process being transparent. In relation to the Neighbourhood Grants Councillor P Davies indicated that these had been suspended and not cut, which he also felt was a responsible action to assist in addressing the budget issues.

Councillor P Davies circulated an amendment to the recommendations contained within the report and indicated that the amendments offered clarification to the reporting of the overspend which was inherited and to ensure that targets set were achievable. Councillor P Davies further suggested that he be requested to write to the Secretary of State for Communities and Local Government, to seek an urgent meeting in the face of unprecedented cuts in Government funding at a time of increased demand for services with Wirral facing a reduction of around a third in the Council’s budget over the next three years, He invited the party Leaders to join him on a cross party basis.

Councillor P Davies moved an amendment, duly seconded, and it was –

RESOLVED: That

(1)  the Cabinet notes the following: That

(a)  at Month 5 (August 2012),  the full year forecast projected a potential General Fund overspend of £15.3m;

(b)  the potential overspend for 2012/13 was not the result of poor financial management in the first half of the financial year, but was mainly attributable to a 14.6m overspend carried forward from 2011/12;

(c)  a number of the targets set for savings and income in 2012/13 were unrealistic. Cabinet welcomes the review being undertaken by the Interim Director of Finance of our over/underspends and Earmarked Reserves with a view to ensuring that budget inaccuracies are corrected and future budgets are soundly based;

(d)  the M4 monitor will be presented with this M5 monitor.

(2)  the Cabinet agrees to the following:

(a)  The rejected freeze items set out at Appendix 8 in the columns ‘Rejected’ totalling £1,071,638, as evidenced at paragraph 2.20 within the report;

(b)  That the Leader of the Council write to the Secretary of State for Communities and Local Government, to seek an urgent meeting in the face of unprecedented cuts in Government funding at a time of increased demand for services with Wirral facing a reduction of around a third in the Council’s budget over the next three years.