Cabinet
member for Finance and Property Assets introduced the report. Also
present was Head of Finance, and the Strategic Finance Officer was
present online to answer questions. The Cabinet member explained
that the main points were that there had been a reduction in net
expenditure and a carry forward of capital spend.
Head of Finance added the following points for
committee to note:
·
On revenue, the budget raised to £21m from the
projected £15m at budget setting in 2022, including budget
carry forwards and slippage in one off Revenue growth schemes from
the previous year being added to the budget and the £21m
formed the basis of the variance for the year in terms of Revenue
expenditure.
·
Table three points out that there was an underspend
on expenditure of £3.4 million but when we take into account investment income there’s no
significant underspend.
·
There was a significant carry forward of over 4
million from certain schemes and these are shown in more detail in
appendices.
·
This budget was set the week before the invasion of
Ukraine began which means that our expenditure budget did not take
account of what happened to the economy during 2022-23 where we saw
our costs go up which we had not foreseen when we set the budget.
We also saw interest rates go up and utility costs supplies and
services costs go up but at the same time we had more money in our
investments.
·
Regarding capital and the significant slippage over
the last two years. We had undertaken a very detailed piece of
work, looking at the revenue budget. It had been subject to
significant budget challenging exercises, but we had neglected
capital from such an exercise but we
were rectifying that as we speak. We're in the middle of a capital
programme challenge exercise now, which was reviewing all of our
current capital projects in terms of meeting current corporate
priorities and making sure we've got the funding.
·
We had not got the profiling right when we set the
capital program for 22-23, which we were endeavouring to fix as
part of next year's budget setting.
·
There were significant slippage items - those
relating to the Community Infrastructure Levy (CIL) funding. As
part of our current CIL funding strategy, we allocate all the CIL
we take after the amount for Parishes and the admin levy. 50% was
allocated to Oxfordshire County Council, 20% was allocated to
Clinical Commissioning Group (CCG) and 30% was for South
Oxfordshire. What the underspend represents was money that we had
collected on behalf of CCG and hold for the CCG to spend on schemes
on their behalf. We await details from CCG on what schemes the
funding should be allocated to.
Below summarises the main comments and questions
raised by the scrutiny committee.
- Committee asked
questions of clarification on the underspend and the impact of the
war in Ukraine in terms of inflation. It was responded that there
was no concern that the grant funding wouldn’t be enough to
achieve the scheme outcomes.
- Policy Programmes
underspend £4m – what was behind these underspends, was
it transformation projects phasing? It was explained by Head of
Finance and Deputy Chief Executive for Transformation and
Operations that profiling changed due to changes to the programme.
Of the 16 projects planned over 5 years, some projects were moved
around so the phasing changed. Didcot Garden Town and Berinsfield Garden Town projects were now allocated
and had delivery plans to match grant funding. The Cabinet member
for Finance explained that the impact was a slow down on project
delivery, but the budget didn’t reflect that the money
couldn’t be spent in just that year, but the capital review
would give better understanding and improve the profiling and
presentation of this in budget reports.
- Cabinet member for
Corporate Services added that a programme manager was now employed,
and a team was in place for delivery of transformation projects.
During 2022-23 the team had to settle in.
- Para 24 page 15: 200k
for revenue project - it was commented
that a Cabinet Member had identified this income from business
rates. Head of Finance provided some context on business rates:
there was no requirement for businesses to tell the council.
Resources were needed to check businesses. The inspection regime
was not easy. Some businesses were hard to spot. A member who knew
their area well identified businesses they knew of. Mapping
technology helped identify these businesses who weren’t
paying rates. We used a third party with tools to help, on top of
the inspection regime. This was set to continue.
- Deputy Chief
Executive for Transformation and Operations would respond to a
question on the £200k underspend on the climate projects and
what was driving that (paragraph 23, page 15 of the agenda
pack).
- Queries on Homes for
Ukraine scheme underspend. It was responded that the war
wasn’t happening when the budget was set. Support money was
received from government in response. This was a phasing of funding
received to support Homes for Ukraine. We can carry forward
funds.
- National non-domestic
rates (NNDR) – a member asked about appeals to rates. Head of
Finance explained that there was provision for if a bill was
challenged. We were likely over prudent about debt after the end of
Covid but can release those provisions at the end of the
year.
- A realistic Capital
programme with better profiling – Head of Finance explained
that external and internal funded capital programmes will be in the
budget papers as separate budgets. There was improved use of
CIL/S106 and external funds.
- Will slippage go
beyond 2024/25? Head of Finance wanted a realistic capital
programme, hoping that slippage would become minimal over time. It
was explained that the delivery of some schemes was optimistic,
hence the underspend. The review will assist in correcting
this.
- Item 13/14, page 14
– agency staff costs – can we reduce? It was responded
that the Legal team were trying to address this through
restructure.
- A member asked for
detail of variances of revenues for Planning and Development &
Corporate Landlord. The former was due to a downturn in the
economy, where there were less applications. The latter was due to
Cornerstone and carparks. This was detailed in the report. A
Cornerstone report would be presented in December.
- A member asked about
budgeting for planning appeals.
Chair gave thanks for the
report.
Resolved:
Committee noted the report and
provided comments for Cabinet:
1.
Committee were concerned that temporary/agency staff costs needed
addressing
2. On
planning appeals, we should have a cost budgeted for appeals,
including legal costs. We should recognise the cost.
3. We need
to have good control over the capital budgeting process and ask
extra questions around it.