At this early stage, parking is forecasting that it will end the year £413,000 favourable against budget. Residents’ services department is forecasting that it will end the year £753,000 adverse against budget. Taken together, the forecast is for an adverse variance of £340,000 if mitigating actions were not taken. The Committee is asked to note this report and comment on measures that should be considered.
Nick Austin stated that Residents’ Services was a new department and budgets may alter as the structure was still being finalised. He gave a breakdown of services provided by the department.
The Chair observed that if by month 2 the department was projecting an overspend in commercial services, how effective was the budgeting forecasting? Nick stated that the budget had been challenging and the department was looking at other ways to resolve the issues. Councillor Schmid added that the budget was drawn up in the January 2018. The climate had changed over the past five months. The department was developing measures to reduce the overspend. Nick explained that as it was early in the year a cautious approach was taken when producing the monitoring report. There is a reduction in the projected licensing fees due to a change in legal definition about what is recoverable in a licencing fee. Income targets in some areas will be adjusted if other sources of income cannot be identified.
Councillor Vincent questioned whether it would be useful to use trend analysis in our budgeting. Chris Littmoden asked for a commitment to use trend analysis to help with the budget. Hitesh informed the meeting that trend analysis was used as part of the budgeting tools. Prakash Daryanani advised that Social Care used trend analysis to aid forecasting. At the beginning of the year and during the quarterly budget monitoring process trend analysis were relied upon.
It was agreed that the use of trend analysis to aid quarterly budget monitoring would be introduced.
Action: Hitesh Jolapara
The Chair noted that the sports operations bookings income budget was lower than last year’s outturn and queried the reason for this. Nick agreed to circulate an explanation.
Action: Nick Austin
The meeting also noted the drop in projected PCN income. It was explained that this was a general trend across London. With the introduction of cashless parking technology, people can now top up their parking from their phones avoiding a PCN for overstaying and other customer behaviour changes.
The Chair asked Nick how he used the data detailed in the report with his team and how often did they meet to go through budgets? Nick stated that they met weekly and discussed finance regularly. Regular monthly income and expenditure reviews also took place with the team. Nick added that with regards to agency spend, the team had looked at every post to ensure that the use of agency staff was justified.
Councillor Quigley inquired about the additional cemeteries income. Nick explained that an increase in burials was projected. The Chair asked whether dynamic charging had been considered in relation to the borough’s sports facilities, such as the tennis courts in Ravenscourt Park. Nick advised he would take this away to look at and consider.
Action: Nick Austin
Councillor Vincent asked for the related costs and savings of the Council’s reorganisation. Hitesh advised that one-off costs of around £500,000 had occurred.
Kim Dero (Chief Executive) stated that the reorganisation had streamlined senior management posts from 9 to 7. The Council now has 2 directors looking after the Place, 3 directors in charge of Care and 2 directors covering Corporate issues. We have stripped out management costs and better streamlined services. Now we are doing few things well against doing a lot of things not so well. She noted that lessons have been learnt from Grenfell on fire safety and health and safety issues. We will not make short term gains which in the long term would be detrimental to us.
The Chair asked if he were to set as a challenge to hit the budgets on every income line, would this be achievable by the year end? Nick advised that the expectation was to meet budgets targets by the end of the year and where this was not possible to introduce other mitigations. Kim added that there would be zero tolerance for over spending in any department. Directors must be accountable for their budgets.