Item 6.7

North Somerset Council

REPORT TO STRATEGIC PLANNING AND ECONOMIC DEVELOPMENT POLICY AND SCRUTINY PANEL

Date of Meeting: 11 December 2006

Subject of Report: Quarter 2 Finance and Performance Monitoring 2006/07

Town or parish: All

Member presenting: Chairman

Key Decision: No

 RECOMMENDATIONS

That the Panel note and consider the attached Corporate Finance and Performance Monitoring report for Quarter 2.

1. Summary of Report

To inform the Panel of the anticipated financial position for the Council’s General Fund and Contract Services as at 30^th September 2006, together with monitoring of key performance targets.

Please note the new format of the report, which sets out the Council’s quarter 2 financial position alongside quarter 2 progress of the Council’s Key Corporate Performance Indicators (KCPIs).

This report (excluding Appendix 1) is extracted from the report that went to the Executive on 7^th November 2006.

2. Policy

None

3. Details

3.1 The attached report provides the second quarterly budget and performance monitoring report, for the 6 months to September 2006. The report is summarised into the following sections:

o Part 1 – Overall summary position for Finance and Performance

o Part 2 – Identifying relevant key variances

o Part 4 – Relevant Directorate commentaries

o Appendix one - General Financial and Performance Data relating to Adult Care and Housing

3.2 Part 4 of the report incorporates a comprehensive commentary from each relevant director which includes a financial and performance overview for their service area. It also identifies service delivery achievements, major performance and financial variances together with any mitigation factors or further actions that may need to be taken.

3.3  Performance Monitoring

The Corporate Plan 2005/06 to 2007/08 contains targets for each of the Council’s Key Corporate Performance Indicators (KCPIs) and these are grouped by the Council’s corporate priorities. Actual performance against these targets is monitored on a quarterly basis.

In Quarter 2, 37 KCPI results are known (of the 67 indicators in the Corporate Plan). From these 37 results:

o 59% of these KCPI results have shown improvement since the year end of 2005/6

o 81% of these KCPI targets for 2006/07 look set to meet the ambitious annual targets set in the Corporate Plan 2005/6-2007/8.

Details of the Council’s key service delivery achievements are highlighted within each of the relevant Directorate commentaries, together with further action reports where necessary.

3.4 General Fund Revenue Expenditure

Part 1 of the attached Monitor, shows that there is projected net overspend on the Council’s General Fund revenue budgets of £243k at the year-end. This projection includes variances arising from key risks identified within the Medium Term Financial Forecast, as well as other financial variances over £50k.

However, Members will recall that the Council has been advised that it will receive approx £0.314m from Bristol City Council in relation to the balances and reserves of the former Avon County Council. In addition, the Council has received approximately £0.184m relating to refunds of NNDR. It is therefore projected that there will be a net contribution to the Council’s General Revenue Reserves of £0.255m at the end of the financial year. This compares with a projected contribution from reserves of £0.600m at month 5.

The reasons for the projected net overspend are incorporated within each of the relevant directorate commentaries, but Part 2 of the Monitor does highlight the relevant major variances and issues identified by the Council.

The Corporate Management Team continues to monitor the Council’s financial position on at least a monthly basis. It accepts, given the additional context of the anticipated budget position for 2007/08, the need for mitigation of the projected overspending and has agreed five broad strategies:

o Continued support and constructive challenge to ASS&H for its action to contain its own expenditure (detailed elsewhere in the M6 monitor)

o Specific actions that will introduce underspendings or increased income (notably in F&R - again, detailed elsewhere in the M6 monitor)

o All proposed uses of underspendings to be minimised, and restricted to those relating to health and safety and other risks, and to be considered by CMT prior to specific approval by the relevant Executive Members

o All spending on equipment and furniture to be restricted to that which is needed in respect of health and safety requirements or equalities issues, or which demonstrably improves the efficiency and effectiveness of the Council’s services

o Closer monitoring of staff costs – all requests to fill vacancies are currently actively reviewed by directors individually and by CMT collectively. Staff recruitment will be tightly controlled with appointments only being progressed where there is a proven need and recruitment cannot be avoided or deferred; in addition agency and temporary staff commitments will be reviewed and additional scrutiny introduced of job evaluation requests for new proposed posts.

CMT has considered further measures, such as a recruitment freeze, a moratorium on equipment and other discretionary spending (such as highways maintenance) and cancellation of planned training and development courses, but considers that such an approach would be indiscriminate and lead to increased pressure on existing staff and deterioration in service delivery standards in an unplanned way. However, such measures remain options that can be further considered at a later stage if the financial position fails to improve. At this stage it is expected that implementation of the bullet point actions above will lead to a steady, month-by-month improvement in the Council’s projected outturn position.

3.5 General Fund Capital Monitoring

 Part 3 of the attached report provides Members with an overall assessment of capital expenditure and financing, and also identifies projects with projected variances.

4. Consultation

None

5. Financial Implications

This report contains financial implications throughout.

6. Equality Implications

None

7. Corporate Implications

The KCPI report is part of the Councils overall Performance Management Framework, and is integrated into the Corporate Plan 2006/7-2007/8.

8. Options considered

None

Author

Peter Sloman, Head of Financial Management, 01934 634619

Shane Trevett, Scrutiny and Performance Team Manager, 01275 884009

Extracts taken by Michael Joy – Scrutiny & Performance Officer on behalf of the Strategic Planning and Economic Development Policy and Scrutiny Panel

Background Papers

None

PART 1: OVERALL SUMMARY POSITION FOR FINANCE & PERFORMANCE

General Fund Revenue Expenditure

The General Fund Summary as at 30^th September 2006 is shown at Appendix 1a. The summary provides for the use made of earmarked reserves available to Directorates at the end of 2005/06 and, in addition, the revised budgets reflect the minor virements that have been approved during the first 6 months of the financial year. The projected year-end position on the General Fund for 2006/07, as at the end of Period 6 / Quarter 2, is as follows:

	£000
General Fund Approved Budget for the year	121,846
Predicted year-end position	122,132
Projected overspend on GF services as at 31^st March 2007	243
Contribution re Former Avon CC reserves and balances	-314
Windfall savings re NNDR Refunds	-184
Currently anticipated contribution to General Fund non-earmarked reserves	-255

The projected net overspend of £0.243m (or 0.2% of the Council’s net budget), has arisen within the following areas:

	£000
Children & Young People’s Services	224
Adult Social Services & Housing	864
Development & Environment	-138
Finance & Resources and Corporate Services	-109
Capital Financing and Interest on Balances	-635
Non Service Budgets	37
Projected overspend on GF services as at 31^st March 2007	243

The Corporate Management Team have been monitoring and reviewing the Council’s financial position in recent weeks in order to identify and approve mitigating actions where appropriate. It should be noted that the overspend of £0.243m has reduced significantly from the Month 5 projection of £0.914m, mainly as a result of changes within the Waste and Investment Interest budgets.

Key Corporate Performance Indicators

The Corporate Plan 2005/06 to 2007/08 contains targets for each of the Council’s Key Corporate Performance Indicators (KCPIs) and these are grouped by the Council’s corporate priorities. Actual performance against these targets is monitored on a quarterly basis.

In Quarter 2, 37 KCPI results are known (of the 67 indicators in the Corporate Plan). From these 37 results:

· 59% of these KCPI results have shown improvement since the year end of 2005/6

· 81% of these KCPI targets for 2006/07 look set to meet the ambitious annual targets set in the Corporate Plan 2005/6-2007/8.

Details of the Council’s key service delivery achievements are highlighted within each of the Directorate commentaries, together with further action reports where necessary.

PART 2: IDENTIFYING KEY VARIANCES

Financial and Performance Key Variance Issues

The detailed reasons for the projected net overspend of £0.243m at the year-end are incorporated within each of the relevant Directorate commentaries shown in Part 4, as are performance achievements, but the major issues resulting in financial or performance variances are shown in the table below:

Corporate Priority	Projected General Fund Variance	Performance Issue
Enhance the quality of our natural and built environment		% of major applications decided within 13 weeks (KCPI 29, BVPI 109a). has improved since being raised as a Further Action Report in Quarter 1 2006/7, but is still off track to meet its end of year target of 63% in 2006/7 standing at 56.8% in Quarter 2 of 2006/7. This is down from the annual out turn of 73.6% in 2005/6. See D&E Directorate Commentary on Service Delivery Achievements on abandoned vehicles and street cleanliness
Improve transport infrastructure		The KCPIs for transport infrastructure have annual targets only.
Promotes safe and sustainable travel		The KCPIs for safe and sustainable travel have annual targets only.
Increase local job opportunities in Weston-super-Mare		Economic regeneration performance indicators are being developed. See D&E Directorate Commentary for Service Delivery Achievements of the Ready4Work scheme
Reduce economic exclusion and deliver area-based community regeneration
Promote Weston-super-Mare as strategically significant town

PART 4 COMMENTARY FROM THE DIRECTOR OF DEVELOPMENT AND

ENVIRONMENT

Director: David Turner

Directorate Overview

Budget

The current estimated outturn position for the Directorate, after use of earmarked

reserves is £43.410m compared to a budgeted amount of £43.545m, giving an

anticipated variance of £0.135m under spend or -0.3% of the directorate budget.

KCPIs

The Development and Environment Directorate has data returns for 18 KCPIs in

Quarter 2. 83% of the KCPIs are on track to meet their annual target, and 3 KCPIs

require further action to reach their end of year target (which were covered previously

in Quarter 1). There will be an additional 13 KCPIs monitored over Quarter 4 with

end of year targets only.

Service delivery achievements relevant to the Strategic Planning and Economic Development Policy and Scrutiny Panel

The speed of processing minor applications (KCPI 29c, BVPI 109b) remains on

track to achieve a 2006/7 end of year target of 68%, and currently stands at 75.5%.

There were 88% of “other” planning applications decided within 8 weeks for

Quarter 2 (KCPI 29a, BVPI 109c). This is on track to meet its end of year target.

There are beneficiaries of the Ready4work scheme being monitored as part of the

process of enabling people on incapacity benefit and income support living in

WsM South and Central wards to be helped by the Council into sustained

employment. The latest figure shows this to be on track to meet its end of year target

of 45 people being assisted for 2006/7 (KCPI 43.)

Business case for the decriminalisation of car parking enforcement is complete.

North Somerset Replacement Local Plan – consultation on modifications complete

– report to Council in November recommending adoption

Successful bid for investment in the Greater Bristol Bus Network

The Weston Area Action Plan – The first three stages are complete for the next

stage to be reviewed as part of the Local Development Scheme

The Neighbourhood Renewal – Neighbourhood Management Board for South

Ward established for the project.

Civic Pride - Grove Village, Meadow Street and the repaving of Big Lamp Corner

has been completed

Knightstone Island – on target for completion mid 2007

Tropicana – conditional development agreement programme to be signed in

December 2006

Major variances and further actions

(Risks Identified within the MTFF)

Income targets and increases in income (£70k overspend)

o Industrial Units and Depots - £31k overspend

o Car parking income - £26k overspend in relation to permit income not being

received as anticipated

Other Variances over £50k

The variances identified to date are: -

Refund of NNDR on Seafront Car parks (52k underspend) - Following a revaluation of car parks, there is an underspend in this area, however, some of this is being used to offset a slight under-recovery of car park income when compared to budget.

Major planning applications decided within 13 weeks (KCPI 29, BVPI 109a)

This has improved since being raised as a Further Action Report in Quarter 1 2006/7,

but is still off track to meet its end of year target of 63% in 2006/7 standing at 56.8%

in Quarter 2 of 2006/7. This is down from the annual out turn of 73.6% in 2005/6.

Workloads have increased and the team has suffered from serious staff sickness.

The team has made more decisions in the first half of 2006/7 than in the equivalent

period last year (44 compared to 37) and has received 24 more applications (68

compared to 44). Further delay is caused by the need to refer applications to

Committee for decision. Additional resources have been put into the team since July

to give improved sickness cover and this is being kept under review.

Economic regeneration performance indicators

These are being developed for 2007/8 from the Economic Development and

Regeneration Strategy and Local Area Agreement. Baseline data for indicators such

as footfall in the Sovereign Centre and Town Centre (KCPI 44) will be secured during

2006/7.

Financial and Service Risks and Further Action

The main financial risks inherent in the Development and Environment budget are set

out in the published MTFF. In addition to this, the following specific risks /

assumptions have been identified:

�� None at this stage

Action

Concessionary Fares – early indications are that mandatory expenditure in

relation to concessionary fares is likely to be in the range of the existing budget

provision. However, there are still a number of unknown factors that could

increase this expenditure, including:

• Further growth in take-up of free travel

• Any changes in fares

• Any seasonal factors

• Appeal by First to DfT on method of calculation

• Costs associated with capacity

Additional expenditure in this area cannot be mitigated against.

Anticipated / proposed contributions to / from earmarked reserves

At this stage, it is anticipated that Development and Environment will utilise the

following earmarked reserves during 2006/7 and these sums have been reflected

within the directorate revenue monitoring statements: -

£50k - Car Park Management shown within Leisure and Libraries

£25k - Road Safety shown within Transport and Planning Policy

Efficiency Gains

The Directorates efficiency gains target for 2006/7 is £1,422k. It is anticipated that

this target will be exceeded by £542k, largely as a result of increased efficiencies in

waste management due to reducing tonnages, as shown in the table below.