Agenda item

            The Committee considered the undernoted report:

“Relevant Background Information

      As discussed at Strategic Policy and Resources Committee on 24 September, there is a potential forecast underspend of £2.9m in 2010/11. Given the early stage of the year it was agreed that up to £1.9m of this underspend is subject to debate at this stage, with any remaining underspend considered at a later point in the year, when the financial position is clearer.

      In terms of the utilisation of the £1.9m forecast underspend to be discussed at the moment, it was agreed that Members would take into account:

(a)     that this is an in year underspend which should be utilised to support one off revenue initiatives rather than ongoing revenue expenditure, to avoid an implication for the 2011/12 rates setting exercise; and

(b)    in order to maximise the benefit for the 2011/12 rates setting exercise, it would be preferable if such one off revenue initiatives either pulled expenditure forward into 2010/11 from 2011/12 (eg. invest in reserves in 2010/11 rather than as part of 2011/12 rates setting etc ) or lowered the cost base of the council in 2011/12 (invest to save type initiatives); and

(c)     the monies must be capable of being planned for and spent by 31 March 2011

      It was agreed that Strategic Policy and Resources Committee would consider a report on specific proposals for the utilisation of the £1.9m underspend at its meeting on 22 October 2010 and Members were asked to liaise with officers regarding any such proposals.

Key Issues

      Proposals for Utilisation of £1.1m of the 2010/11 Underspend

      A range of proposals have been developed for the consideration of the Strategic Policy and Resources Committee which would utilise some £1.1m of the underspend. These are set out in the table below and are described more fully in the appendix which has been circulated for the information of the Members.

      As set out in Appendix 1, the specific utilisation of the Investment proposals would be worked up with the relevant Standing Committee, if approval is given by the Strategic Policy and Resources Committee to proceed on this basis.

      Implications for Rates Setting for 2011/12

      Together these saving proposals are estimated to make some £700k savings available for consideration as part of the 2011/12 rates setting process and would provide additional services in relation to local areas and derelict properties. For information, £700k of savings could finance £7m of capital expenditure. Given the mid point of the year, approval is sought for the above proposals so that the savings can be achieved for 2011/12 and/or the services provided by 31 March 2011.

      Consideration of the Remaining £0.8m Underspend at this time

      Strategic Policy and Resources Committee agreed on 24 September that up to £1.9m could be considered for utilisation at this stage of the year. Therefore, Members can identify and agree additional proposals (which meet the criteria) of up to £0.8m or indeed, replace any of the above proposals. Party groups are asked

to liaise with the Director of Finance and Resources urgently regarding any such alternative proposals, so that, if agreed by Strategic Policy and Resources Committee at its next meeting, they can be actioned by 31 March 2011. If there are no further proposals, any unutilised underspend can be considered in the Financial Report for Quarter 3 2010/11, as set out below.

      Consideration of any Unutilised Underspend

      Should the actual outturn remain at £2.9m, there will still be an unutilised underspend, the scale of which will depend on the extent of proposals agreed by the Strategic Policy and Resources Committee above.  It is proposed that decisions on the utilisation of this remaining underspend should wait until the Financial Report for Quarter 3 2010/11, but possible uses could include:

·         as first priority, investment in the District Fund Reserve, thus avoiding any further contribution to the District Fund Reserve in the rates setting process for 2011/12. Strategic Policy and Resources Committee was advised on 11 December 2009 that the reserves of Belfast City Council should be in the range of £8m to £10m. Some £1m of the 2010/11 underspend would be needed to provide District Fund reserves of £10m by 31 March 2011;

·         investment in other reserves such as Repairs and Renewals Fund (which allows the Council to financially plan for the cost of future major repairs), Election Fund, City Investment Strategy etc; and

·         offsetting any reductions in the planned level of rate income in 2010/11 from the write off of rates debt.

Resource Implications

      Proposals have been identified which would utilise some £1.1m of the 2010/11 underspend and achieve savings of £700k from 2011/12. Based on current estimates, this would leave some £1.8m of unutilised underspend at this stage.

Recommendations

      Members are recommended to:

(a)     consider and approve the proposals set out in Appendix 1, a copy of which has been circulated, would utilise £1.1m of the 2010/11 underspend:

·         £248k is used for the VR exercise in Parks;

·         agree that work is now undertaken with the Council’s departments to identify any areas of potential redundancy with a view to a report being brought back to standing Committees and SP&R in relation to any detailed proposals for VR up to a maximum cost of £1.2m, including the type and number of posts; redundancy costs; payback period and potential savings.

·         £110k is used to secure energy savings at a number of council properties;

·         £60k is used to secure water savings at the Zoo;

·         £100k is used to improve the tourism offer in local areas;

·         £60k is used to carry out a pilot programme to more proactively manage derelict properties.

(b)    liaise with the Director of Finance and Resources regarding any further proposals, which would be considered at the next Strategic Policy and Resources Committee, up to a maximum of £0.8m; and

(c)     agree that any remaining unutilised underspend is considered by the Strategic Policy and Resources Committee in the Financial Report for Quarter 3, 2010/11.”

            The Committee adopted the recommendations.