Annex 1

Financial Management Report for Quarter 3 (to 31 DECEMBER 2006)

Revenue Budget

The Council’s budget for 2006-07 was based on an ambitious redirection of resources, to be funded by £7.5 millions of savings, largely from efficiencies.

By the end of the second quarter, and despite a number of significant further pressures which had arisen in year, the projected overspend had been constrained to £401,000 (approximately 0.3% of net spend)

Three rounds of service boards have taken place since then, and corrective action has been identified which has reduced the projected overspend to £138,000. Further work on reducing this continues, with the intention to deliver a fully balanced position by the year end.

Key features of the current projection by Cabinet Member areas of responsibility are:

Cllr Wood	A net overspend of £218k, due in particular to core ICT project costs, offset by an improvement in Land Charges compared to budget expectations and unfilled Finance posts.
Cllrs Joyce and Cousins	Net overspend of £1.075m, due in particular to increased agency placements and other client pressures. Spend to save projects and other means of controlling these budgets are under development.
Cllr Cousins	Demographic growth budget has been applied in part to learning disability pressures and the savings target, leaving £1.093m which has been returned to the centre.
Cllr Ward	Parking income is higher than expected, but the concessionary fares budget is expected to be £900k overspend due to high levels of take-up. After applying part of the contingency set aside for the cost of the residents’ permit, a remaining £145k has been returned to the centre.
Cllr Hunter-Henderson	A net overspend of £509k results largely from the Business Transformation Unit and some one-off staffing costs in the call centre.
Cllr Abraham	Savings of £321k more than the target have been identified, relating particularly to crematorium income and Fire and Rescue Service efficiencies.
Cllr Brown	Higher than expected planning fee income and savings from restructuring the homelessness service have contributed to a net saving of £81k.

Capital

The following table shows the total budget by cabinet member for capital schemes, forecast spend by year end and the total overspends and total underspends on schemes by the end of the current year. Also shown are the totals for schemes projected to be over or underspent over their whole life. These two sets of measures taken together provide an indication of how much expenditure variances are an issue of timing, and how much they represent a change in the total financing requirement of the programme.

	Budget	Projected	Variance	Over in year	Under in year	Schemes Over/under
	£000	£000	£000	£000	£000	£000
Cllrs Joyce & Mrs Cousins	12,670	12,508	-162	330	492	266
Cllr Cousins	3,669	3,572	-97	3	100	2
Cllr Hunter-Henderson	1,264	1,244	-20	58	78	58
Cllr Abraham	356	349	-7	7	0	0
Cllr Wood	838	1,104	266	285	19	202
Cllr Ward	7,243	7,068	-175	291	466	5
	26,040	25,845	-195	974	1,155	533

As at the date of the report, the projected net underspend for the financial year is £195k, but within that figure there are projected overspends on individual schemes of £1,155k, so the true level of projected slippage into 2007-08 is £974k.

The most significant area of expected slippage is schools.

The disposals programme continues to be monitored closely, as any shortfall or delay will have implications for both prudential borrowing and for revenue savings in 2007-08. The overcommitment of £533k will be offset by increased receipt generation, or cost reduction.