Agenda item

          The Sub-Committee considered a report which summarised the overall revenue and capital spending position as at 30^th September 2009.

          In overall terms, revenue expenditure was below the budget profile. However, this was only a guide to eventual spending. It was noted that spending on employees was also below the budget profile which was primarily due to the delay in settling the 2009 Pay Award. The Budget included 2.5% for the pay award, which had now been settled at just over 1% in total and the new rates were paid in October along with the arrears of pay. As a result, budgets would be revised to reflect the actual pay award. However, this would be partly offset by the additional 0.3% awarded in respect of the 2008 Pay Award following arbitration, which was 0.25% higher than budget.

          Following the Pay and Grading Review appeals for the Health and Community Directorate have been completed resulting in a total additional cost in the year £280,000. This comprised £141,000 relating to one off back pay costs which had been met from reserves and £139,000 for on-going additional annual costs which would need to be contained within existing Directorate budgets. In addition, it was noted that electricity costs were expected to be below budget following the commencement of a new contract in October 2009.

          With regard to income, this was currently below budget profile in a number of areas, some of which may be reflected by the economic downturn and, at this stage, appeared likely to be below budget by year end. It was expected that the shortfalls would continue into next year. At this stage, it did not appear that the shortfalls in income were having an adverse effect upon the Council’s overall net budget. However, this would be due to delays in spending and would need to be kept under close scrutiny by Directorates during the second half of the year.

          In respect of capital spending, it was noted that spending to 30^th September 2009 totalled £10.7m which was 69% of the planned spending of £15.4m at this stage. However, this only represented 29% of the total capital programme of £37.5m (which assumes a 20% slippage between years). The main areas of programme slippage to date were in respect of Mersey Gateway advance land acquisition and Bridge maintenance.

          Although historically capital expenditure was significantly higher in the latter part of the financial year, it was important that project managers maintained pressure to keep projects and spending on schedule and, in particular, to ensure that all external funding was maximised.

          It was also noted that the Council’s balance sheet was monitored regularly in accordance with the Reserves and Balances Strategy which formed part of the Medium Term Financial Strategy. The key reserves and balances had been reviewed and were considered prudent and appropriate at this stage in the financial year.

          RESOLVED: That

          (1) the report be noted;

          (2) budget managers continue to closely monitor and control spending and income levels, to ensure that overall spending remained in line with budget by year end.