The Committee is asked to consider the Financial Management Year End report 2019/20.  The Leader and the Chief Financial Officer have been invited to attend the meeting.

The Leader introduced the report which set out the revenue and capital projected outturn position for 2019/20.  He reminded Members that this was based on the budget set in February 2019 and was considered by Cabinet in July 2020, when there had been lots of questions and debate. 

The Leader highlighted the variances on Page 8, Table 2 of the report which included the costs for homelessness being lower than expected and the unexpected costs to defend public appeals, and he spoke positively on the revenue received from the Princes Street Retail Park.  He drew attention to the General Fund Balance on page 9 of the report and highlighted the revenue underspend of £64,188.

A Member sought clarification on £800k for Corporate Priorities at paragraph 3.10 on page 10 of the report.  In response, the Leader explained that £800k had been transferred from the Kent Pool Economic Development Business Rates Reserve to a new reserve called Shared Business Rates Allocated to Council Priorities.  He explained that the allocation of this reserve was the subject of planning by a Cabinet group and that it was intended to contribute to economic resilience in the face of the Covid-19 pandemic, with a preference for improvements in the three town centres of Faversham, Sheerness and Sittingbourne.

In response to a Member’s question on why the Council’s insurance did not cover the full repair to the roof, the Leader explained that as the building had not been properly maintained for many years, the insurance company would not insure it to its replacement value.  In response to the same member about the influence of the Covid-19 pandemic on variations, the Leader explained that this only came into effect at the end of the budget period.

The Chairman went through the Main Variations by Service on Table 8 on pages 17 to 26 of the report.

Members raised the following points:

·         Suggested including a summary of staff underspends and costs in each department;

·         were vacancies included as a reduction?; and

·         why was the £192k additional consultancy costs for defending two public enquiries not shown against the Planning variance?

In response, the Leader and the Chief Financial Officer explained that not filling vacancies had caused underspends and whilst staff salaries were the biggest area of the budget at £12million, the variances were comparatively minor.  The Leader said that the planning consultancy costs were unwelcome but necessary to defend development as the public wanted.  The Chief Financial Officer added that the spend was on legal costs which were not directly under the control of the Head of Planning Services, but he agreed to include additional information that it was paid for out of the General Fund.

There was further discussion on underspends on staff salaries and a Member asked whether the public were being provided with the best service if there were vacancies and salary underspends?  The Chief Financial Officer explained that there was no blanket recruitment freeze or policy of not filling posts, but consideration was given on whether a particular post was still required, and some managers had alternative solutions when vacancies arose.   The Leader added that staff underspends were historical. At the request of a Member, the Chief Financial Officer agreed to include a summary of net under and overspends and totals on staff salary.

In response to a Member’s question on a £5k rollover in Housing, the Chief Financial Officer explained that Cabinet had agreed that priority areas could be rolled-over.

A Member drew attention to Table 8 on page 21 and said that additional income had been made in refuse collection but the service had failed to deliver.  In the debate that followed, the Leader explained that Biffa had failed to deliver due to lack of manpower resource and inadequate lorries.  He said that the service had improved prior to the Covid-19 pandemic but the administration had inherited a bad contract.  The Cabinet Member for Environment added that many factors were out of the Council’s control.  A Member said that the current contract, was better than the pre-2013 contract, and was a good contract when it was signed.

In response to a Member’s question on what the £75k in reserve for Milton Creek Access Road on Table 10 on page 30 was for, the Chief Financial Officer agreed to report back.

A Member asked whether the £250k for Sheppey Lower Road Improvements  on Table 10, page 30 was for widening or had been reallocated.  The Chief Financial Officer agreed to report back.

A Member highlighted that £88k in Insurance Funds on Table 10, onpage 30 had been in reserves for very many years and suggested it was no longer required.  The Leader thanked the Member for drawing attention to this.

In response to a Member’s question on CCTV Monitoring Control Centre, Table 13, on page 41, the Chief Financial Officer clarified that Members decided not to go ahead with options, not officers and he agreed to update the table.  A Member congratulated officers on the savings and work on the project.  The Leader acknowledged the work by the previous administration on the project.

The Cabinet Member for Environment agreed to confirm the projects referred to at line 19, Table 13, page 43.

The Chief Financial Officer agreed to find out why the overspend on the Sittingbourne Town Centre Regeneration at line 23, Table 13 on page 44 was funded by borrowing.

A Member requested training for accountancy/budgets for Members and it was suggested that this would be raised with the Member Development Working Group.

Resolved:

(1)  That the report be noted.