Agenda item

To consider a report by the Head of Resources.

(Councillor J A Gray, Executive Councillor for Resources, was in attendance for the discussion on this item).

Consideration was given to a report by the Head of Resources (a copy of which is appended in the Minute Book) highlighting the emerging variations to the approved 2014/15 revenue and capital budgets. Members noted that the variations in the net revenue budget thus far represented a saving of £0.171m. The position with regard to the net capital budget reflected slippage of £1.945m, which was the result of items being carried over from 2013/14 and a number of forecast variations. On this occasion, the report also included an update on the Zero Based Budgeting (ZBB) process.

The Executive Councillor for Resources explained that there had been a good start to the year although traditionally the more significant movements within the Budget tended to occur later in the year. He reminded Members that Facing the Future continued to be an important initiative and work would continue to gain pace as Cabinet Members were currently reviewing all outstanding ideas and proposals with their Heads of Service. In addition, the ZBB exercise had begun in preparation for setting the 2015/16 Budget and compiling the Medium Term Financial Strategy in February 2015. The Panel were reminded that the Cabinet had set out its ambition to freeze Council Tax which meant that the Council could not afford to be complacent.

The Executive Councillor also reported on other activities within the Resources portfolio. He informed Members that work was underway to develop a new Assets and Disposal Policy and to reconstitute the Council’s Treasury Management Advisory Group.

In terms of the ZBB process, the Head of Resources explained that October was an important month and work was ongoing to review those services that had been selected for ZBB ‘heavy’ review. Consideration was also being given to those areas where more immediate benefits could be achieved; for example, overtime budgets and vacant posts within the establishment. In response, a Member emphasised the need to avoid the temptation simply to avoid filling vacancies within the establishment to meet savings targets.

In considering the information within the budget monitoring section of the report, Members commented upon the estimated increase in New Homes Bonus of £0.164m. The Panel were reminded that following the Provisional Outturn for 2013/14, the Cabinet had established an Earmarked Reserve for Capital Investment which would provide a future revenue return. Provided that New Homes Bonus continued to be paid there might be an opportunity further to add to this reserve.

In response to a number of specific questions regarding savings forecast within the 2014/15 Budget, the Head of Resources was requested to circulate details of the one off cost relating to the settlement of a legal dispute in the land charges service and the saving on town and parish support, which had been identified within Democratic Services and was yet to be resolved.

Members emphasised that the outcome of the ZBB process would only be as good as the managers’ commitment to it and Members’ appetite for changes to the way in which the Council currently did things. In response to a question regarding the process itself and whether it differed from elsewhere, Members were informed that it was a three year process, with a number of services being selected for ‘heavy’ review each year and the remainder receiving a less detailed review. At the end of the three year period, the process would begin again. Attention was also drawn to the use of a ‘Star Chamber’ as part of the examination of the services, which had been selected for ZBB ‘heavy’ review as a means of providing further challenge in the process. The Chairman suggested that Members should give consideration in advance of the next meeting as to whether it might be useful for the Panel to review one of the ZBB ‘heavy’ services in further detail.

In recognising that ZBB was a continuing process and that an external specialist and external strategic financial expertise had been brought in to lead the process at this stage, Members were advised that it was hoped to develop and transfer in-house a number of the skills used as the process progressed.

Having thanked the Head of Resources for a clear and comprehensive report, it was

RESOLVED

that the Cabinet be recommended to note:

(a)  the Forecast Revenue Budget of £20.699m;

(b)  the Forecast Capital Budget of £5.879m; and

(c)  the proposals for undertaking the Zero Based Budget exercise in preparation for the forward budget.