Agenda item

Budget Monitoring Report 2021/22


The Finance Business Partner (JH) presented the budget monitoring position to the Committee as at the end of August.


The officer explained that they are projected to be down on income by £254,000.00. Expenditure will be overspent by £142,000 giving an overall deficit of £396,000 before any distribution.


The agreed budget distribution for this year is currently at £950,000.  If the position stays at this projection, with a £396,000 deficit and maintain the current distribution of £950,000, the Joint Committee would be looking at a draw from balances of £874,000.


JH noted with the balances, they currently sit at £1.4 million, taking that £950,000 from it would leave a balance of £562,000. This is the position at end of August so they are hoping this position will improve.


JH advised the projected variances on the premises; the overspend could be largely attributed to some repair work that the council have had to do and on the replacement of a heat exchanger unit and fan for the mercury abatement equipment.


This was necessary as expenditure, without it, two of the cremators would have been inoperable.


There is an increase in the premises costs over the last four years, premises related costs have increased by 44%. The officer stated that this is largely due to the age and nature of the equipment needing replacing and repairing.


The services currently show an underspend of £8000, that tends to be more of independent supplies and services budget. Part of that has been taken off by the fact that the Committee has replaced the visual tributes and the audio upgrade; so they have replaced the audio equipment to give them access for visual tributes. That has been taken out of the supplies and services budget.


The revenue budget is meeting the costs for the full audio upgrade as previously agreed by the Committee to come out of reserves.


The income at the end of August is showing a forecast of £254,000. The officer presented a table to the Committee which showed this is due to a decreasing number of cremations compared to the last period. The officer warned that it is too soon to predict if it will increase.


The risk that the officer reported to the Committee is that there is a projected shortfall of £874,000. In order to ensure the £950,000 distribution is still met, they will have to make a substantial draw on the reserves to maintain that position.


The increase in building costs is because they have replaced the boiler and fan to ensure the operation of the two cremators; this will hopefully reduce the ongoing maintenance costs.


JH reminded the Committee to note the budget monitoring place at the end of August and be mindful of the impact this will have on the reserves held by the Committee when considering the works mentioned in the report.

Comments were welcomed by the Committee.


The Committee asked the following/made the following comments:

·        Councillor Jeavons reminded the Committee to take these points into consideration with the exempt item at the end of the agenda before any judgement. Happy to reduce the amount but would like the Committee to consider the last item before making a decision on this.

The Head of Finance (MR) commented as section 151 officer; there are two issues. One is not knowing if the position will get better or not with the paperwork to note which will be discussed later in the meeting for item 9a. It does have the potential to impact on this situation.


When the council set the budgets back then this would be the last year that £952,000 distribution would be affordable, as the situation seems to have worsened since then.


MR explained that they are looking at two broad options; where they could maintain a distribution this year and next year but will have to reduce this year’s budget distribution. If not, unless it improves significantly in the last five months of the financial year, then the council would look at a significant reduction in a single year. Those are the two issues. This decision can be taken at the next meeting. £400,000 is a steep position to recover from and anymore issues on premises costs will have to  be factored into the position as well.


The Finance Business Partner pointed out the variant in the restated return but advised that the bottom line has not changed. There was a £3940 change between staff costs and other payments. This relates to medical referee fees that were paid via the Council payroll system and transferred into supplies and services to come out of professional fees.



The Committee agreed that they will be mindful of the financial situation that JH explained, when they have to make the decision at the next meeting.



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