SUMMARY/PURPOSE

1. To inform members of the latest projections of expenditure against budget for the current financial year, and, where appropriate, of any corrective action required or in train.

BACKGROUND

2. REVENUE EXPENDITURE

A number of spending pressures have arisen during the year, most of which are relatively minor and should be managed within existing service cash limits. This includes the overrun on the APT&C award, the impact of which is £200k more than originally provided.

Major variances which cannot be met in this way are:

	£000
Increased housing benefit demand	150
Rent underwriting for Enterprise House	135
Pop Festival and other Wight Leisure overspends, offset by application of earmarked reserves	386
Island Games bid	30
School transport charge increase	78
Fire-fighter pensions costs	38
Samuel White’s rental income	55
Health & Safety training	26
CPA consultants	37
	935

These can be offset in part by:

	£000
Restructuring savings in addition to those already taken account of in the budget	-132
Reduced capital financing requirement	-56
Lower waste management cost increases than budgeted	-329
	- 517

This leaves a withdrawal from the General Reserve estimated at £418,000 which would then stand at just over £2 millions. At this figure it will be below the 2% of revenue spend which appears to be the Audit Commission’s view of a minimum acceptable level, although the 2003-04 budget process will include a more scientific assessment to determine whether the reserve is adequate, having regard to the risks it has to meet.

3. CAPITAL EXPENDITURE

A list of capital spending against budget on a scheme by scheme basis is shown at appendix A.

In November I reported on a capital over-commitment, with a recommendation that this be referred to Directors for resolution. The Directors have considered the position, and are confident that the over-commitment can be managed through slippage within the existing programme.

EVALUATION/RISK MANAGEMENT

4. Deviation of service and financial plans from those expressed in the budget is a key risk facing all councils, and can potentially lead to service disruption if not dealt with. The financial monitoring process, of which this report is a part, ensures that this risk is continuously monitored, and that necessary action is identified and delivered.

RECOMMENDATION

5. That the report be noted.

BACKGROUND PAPERS

Council publication - Budget 2002-03

6. Appendix A

Contact Point: Paul Wilkinson (823601 mailto:[email protected]

J PULSFORD

Strategic Director for Finance and

Information and County Treasurer

R R BARRY

Portfolio Holder for Resources