Clive Medlam - Director of Resources and Chief Finance Officer Helen Gardiner - Head of Strategic Finance. Appendices A(i-iii) Debt Management

Transcription

1 AGENDA ITEM: 8 Page nos Meeting Cabinet Resources Committee Date 19 January 2009 Subject Monitoring 2008/09 Report of Summary The Leader and Cabinet Member for Resources To consider the Monitoring 2008/09 report and instruct officers to take appropriate action. Officer Contributors Status (public or exempt) Wards affected Enclosures For decision by Function of Reason for urgency / exemption from call-in Clive Medlam - Director of Resources and Chief Finance Officer Helen Gardiner - Head of Strategic Finance Public Not applicable Appendices A(i-iii) Debt Management Appendix B Prudential Indicators Cabinet Resources Committee Executive Not applicable Contact for further information: Gregory Pike ( ) or Helen Gardiner ( ) 42

2 1 RECOMMENDATIONS 1.1 To require Directors to take appropriate action to ensure costs are kept within budget and income targets are met. 1.2 To require Directors to ensure that those capital projects in their services are managed closely to ensure they are delivered within budget and in accordance with the agreed timeframe. 1.3 To note the revised Prudential Indicators. 1.4 To require Directors to monitor their financial risks regularly and ensure that appropriate actions are taken to mitigate these risks wherever possible. 1.5 To note the Council s debt management position. 1.6 To note the Council s creditor payment performance. 1.7 To note the Council s tax collection performance. 1.8 To draw down 165,000 from the Special Parking Account (SPA) reserve for a one-off reduction in parking charges. 1.9 To authorise the regular draw down from the earmarked reserve in the accounts for the Future Shape programme (b) To note the approval of 250,000 funding from balances for the next phase of the Future Shape programme, with this sum now being transferred to the existing reserve account for this programme To note the million risk to balances in the event of not receiving capitalisation direction relating to severance payments That the current 4m forecast interest benefit and any further benefit in the outturn be set aside in a provision to meet any shortfall on budgeted interest earnings in 2009/ That Officers will develop proposals for the allocation of Growth Area Funding to be brought to a future meeting of Cabinet Resources Committee To authorise 250,000 from balances to mitigate for the loss of Waste Performance Efficiency Grant (WPEG) grant To authorise 103,000 from balances to fund the leaf clearance work carried out in October and November To authorise 119,650 drawdown of contingency for delivery of LAA targets 153 and

3 2. RELEVANT PREVIOUS DECISIONS 2.1 Council 4 March 2008 (Annual Budget setting) Cabinet Resources Committee 17 June 2008 (Outturn 2007/08) Cabinet Resources Committee 8 August 2008 (Monitoring 2008/09) Cabinet Resources Committee 2 September 2008 (Monitoring 2008/09) DPR Adult Social Services 16 September 2008 (Exempt) Cabinet 23 October 2008 (Council Deposits in Icelandic Banks) Cabinet Resources Committee 1 December 2008 (Monitoring 2008/09) Cabinet 3 December 2008 (Future Shape of the Council) 3 CORPORATE PRIORITIES AND POLICY CONSIDERATIONS 3.1 Robust budget and performance monitoring are essential to ensuring that there are adequate and appropriately directed resources to support delivery and achievement of council priorities and targets as set out in the Corporate Plan. In addition, adherence to the Prudential Framework ensures capital expenditure plans remain affordable in the longer term and that capital resources are maximised. 3.2 Maximising income and minimising debts and write-offs represents one of the eight key objectives underlying the corporate priority More Choice, Better Value. 3.3 Relevant council strategies and policies include the following: Medium Term Financial Strategy Treasury Management Strategy Debt Management Strategy Insurance Strategy Risk Management Strategy 4 RISK MANAGEMENT ISSUES 4.1 Risk management issues are covered within Section 9 of the body of the report. 4.2 The report to Cabinet on 21 February 2008 included the Chief Finance Officer s recommended target of at least 15m in balances, with a minimum level of 10m. If the financial position reflected in this monitor materialises at the end of the financial year then non-earmarked balances will reduce to m. 44

4 5 EQUALITIES AND DIVERSITY ISSUES 5.1 Financial monitoring is important in ensuring resources are used to deliver equitable services to all members of the community. 6 USE OF RESOURCES IMPLICATIONS (FINANCE, PROCUREMENT, PERFORMANCE & VALUE FOR MONEY, STAFFING, ICT, PROPERTY, SUSTAINABILITY) 6.1 Robust budget and performance monitoring plays an essential part in enabling an organisation to deliver its objectives efficiently and effectively. As a result of this it is a central component of the Council s Use of Resources assessment. 6.2 Use of Resources implications are covered within Section 9 of the body of the report and in the attached appendices. 7 LEGAL 7.1 None arise over and above those referred to within the body of the report. 8 CONSTITUTIONAL POWERS 8.1 Constitution Part 3 (Responsibility for Functions) Section 3 Responsibilities of the Executive, paragraph 3.6 powers of the Cabinet Committees. 8.2 Financial Regulations section The Chief Finance Officer must report to each ordinary meeting of this committee on the revenue and capital budgets. 8.3 Constitution Part 3 (Responsibility for Functions) Section 6 Powers Delegated to Officers, paragraph 6.7 Subject to details being incorporated in the next available budget monitoring report being submitted to Resources Cabinet Committee on the action taken, to write off individual debt amounts of up to and including 5,000 (including cancellation of penalty charge notices or any other sums due to the Council) in consultation with the Head of Legal. 9 BACKGROUND INFORMATION 9.1 Introduction This report summarises significant changes that have occurred since the last detailed monitoring report that was reported to Cabinet Resources Committee on 1 December Significant changes to services specific projected outturns are highlighted in section below table 3. Detailed service appendices and performance data will be included in the next monitoring report to Cabinet Resources Committee in February. 45

5 Table 1(a): Key Financial Indicators Indicator 2008/09 (Position at 19/01/09) 2008/09 (Position at 01/12/08) 1 Revenue Expenditure (a) Balances and Reserves: (i) General Fund Balance 'm (ii) HRA Balances 'm Achieved /Trend (b) Performance against Budget: Variations: (i) Overspends 'm (ii) Underspends 'm Capital Expenditure (i) Slippage 'm (ii) % of actual spend financed by Prudential Borrowing % Debt Management * (i) Total Debt Outstanding over 30 days 'm (i) Total Debt Outstanding over 12 months 'm (iiii) Council Tax - % paid ** % Creditor Payment Performance (i) % of Creditors paid within 30 days % *these figures include debts of 1.5m now approved for write off (CRC ) ** Council Tax collection to 30 November 2008 compared to equivalent data in 2007 Table 1(b): Balances held by schools Balances held by schools under delegated schemes Increase / 31/03/2008 (decrease) 31/03/2007 m m m Nursery Primary Secondary Special 0.35 (0.05) 0.40 Total Less outstanding general fund advances to schools 0.25 (0.47) /09 Revenue Budget Monitoring The Council entered 2008/09 in a strong financial position with general balances of m, well in excess of the balances available in recent memory. This position provides the Council with more flexibility to meet the challenges it faces. However, this strong position could readily be lost over 46

6 the coming year if spend and income are not managed closely within budget with remedial action taken where variances are projected As summarised in the table below, Directorates are currently projecting a 3.262m net overspend for services funded by the General Fund, an increase of 0.776m on the overspend reported to Cabinet Resources Committee on 1 December If realised at 31 March 2009, allocations agreed from balances and this projected overspend would reduce General Fund Balances from m to m. Table 2: General Fund 2008/09 Projected Variations Analysis Forecast Outturn Variation reported to CRC 000 Change since CRC 000 Forecast Outturn Variation reported to CRC 000 Adults Services Children s Service (exc. DSG) Corporate Governance (38) 0 (38) Environment & Transport Executive Office 304 (304) 0 Planning, Housing & Regeneration Resources Central Expenses (1,000) 1,000 0 Total Projected 2008/09 General Fund Variations Allocations agreed from General Fund Balances 2, , General Fund Balances as at (17,447) N/A (17,447) Projected General Fund Balances (excluding school balances) at 31 March 2009 (14,961) 1,098 (13,863) This forecast variation is spread across various services, with the most significant variations shown in Table 3 below: 47

7 Table 3: General Fund - Significant Projected Variations Service Area Forecast Overspend ( m) Adult Services External Placements Planning, Housing & Regeneration Land Charges Planning, Housing & Regeneration Temporary accommodation (0.670) Children s Service Looked After Children Children s Service SEN Transport Resources Libraries Resources Other salaries Major changes since last monitoring report to CRC Planning, Housing & Regeneration Planning income An increased shortfall of 80,000 in planning income is projected. This is due to the continuing deterioration in the economic climate. Housing Revenue Account The Housing Revenue Account (HRA) is projected to underspend by 0.342m in 2008/09, representing a difference of 0.732m to the forecast overspend reported to CRC on 2 September If realised at year end (31 March 2009), this would result in HRA balances increasing to 4.506m. Table 4: Housing Revenue Account 2008/09 Projected Variations Analysis Forecast Outturn Variation reported to CRC 000 Change since CRC 000 Forecast Outturn Variation reported to CRC Projected 2008/09 Housing Revenue Account Variations Allocations agreed from HRA Balances (342) 0 (342) HRA Balances as at (4,164) N/A (4,164) Projected HRA Balances at 31 March 2009 (4,506) 0 (4,506) The overall scale of currently projected variations is significant and reinforces the continuing need to ensure the underlying causes of any overspends are dealt with effectively. Directors are reminded of their accountability for any budget variations within their services, and their associated responsibility to ensure costs and income are managed within agreed budgets. To ensure this is successfully achieved, it is essential that Directors develop action plans for all significant variances, with the aim of ensuring that overall expenditure is 48

8 kept within the total budget available, whilst simultaneously ensuring that services are delivered effectively. Recommendation 1.1: To require Directors to take appropriate action to ensure costs are kept within budget and income targets are met /09 Capital Programme Monitoring The table below summarises the 2008/09 capital programme and forecast outturn: Table 5: Capital Programme Position 2008/09 Revised Capital Programme ( 000) * Change since CRC ( 000) Current Forecast 2008/09Capital Outturn ( 000) Adults Services Children s Service (exc. DSG) 58, ,786 Corporate Governance Environment & Transport** 14, ,051 Planning, Housing & Regeneration 8, ,078 Resources 21, ,469 Central Expenses 3, ,960 General Fund Programme 106, ,685 HRA Capital 31, ,417 Total Capital Programme 138, ,102 * Updated for 2007/08 outturn ** The expected variance at Aerodrome Road Bridge is covered in an exempt report to 8 August CRC Directors are reminded they need to continue to ensure that projects are closely managed during 2008/09 to ensure that they are delivered within budget and in accordance with the agreed timeframe. Recommendation 1.2: To require Directors to ensure that those capital projects in their services are managed closely to ensure they are delivered within budget and in accordance with the agreed timeframe. 49

9 Prudential Indicators A schedule of Prudential Indicators is attached at Appendix B. This is based on the 2008/09 capital expenditure projection and its associated financing. Recommendation 1.3: To note the revised Prudential Indicators. 9.4 Financial Risks The most significant financial risks for each service area are listed below. Given their size and potential impact, they therefore need close and careful management by services. Table 6 Key Financial Risks Service Planning, Housing & Regeneration Key Financial Risks The poor economic climate continues to place development and housing related services, particularly income generation at great risk. Whilst undertaking closer analysis and local housing market research it is forecast that Building Control, Planning and Housing budgets and income, along with Local Land Charges, will be under greater pressure for 2008/09 and beyond. Regeneration business cases are being constantly reviewed in the current uncertain economic situation. Smarter approaches are achieving some progress e.g. Signing of Stonegrove / Spur Road agreements. Ability to fully recover costs from developers for Regeneration schemes. Adults Notting Hill Housing Trust VAT claim - There is a risk that the Council will be contractually obliged to reimburse Notting Hill Housing Trust for VAT that it is not able to reclaim from HMRC in respect of the learning disability re-provision. Block Residential & Nursing contracts - ensuring that the usage of contracted beds is maintained just above the block contract requirement. Transport costs of new contract and rising fuel costs will be passed on to services. Continuing Care - there are ongoing risks relating to the pressure from health to reduce continuing care payments by reviewing clients and transferring them to social care -108 packages. Debt management - The raising of client invoices and debt management will continue to require close attention. Day Service Modernisation and Direct Payments As clients attending in-house day support services (Flightways & Community Network) are transferred to direct payments will necessitate the reduction of fixed costs within services to ensure viability e.g. reduction of staff costs; 50

10 reduction / negotiation to end leases for transport. Catalyst deficit claim A high risk corporate issue, work on which is being led by the Deputy Chief Executive. Top up fees - A complaint has been received which has progressed to the Ombudsman. If the Ombudsman should find against Barnet then the potential impact on Barnet and all other Councils with Social Care responsibilities may be very significant. Learning Disabilities Transfer - work is progressing on the transfer of financial responsibility & funding of clients with learning disabilities from the PCT to the Council. There are a number of risks associated with this, however there are also potential benefits for both parties as well as the clients. Younger Adult Placements - continue to experience extreme demand pressure which are being managed within the service. Adult Care Contracts - Unable to hold contracts at 3% inflation budget bid. The Darzi Review - Lord Darzi launched the Next Stage Review final report on 30 June. It sets out a vision for the development of health services in England over the next ten years. The implementation of his proposals are likely to impact significantly onto the provision of Adult Social Services as the balance continues to shift from acute care to community based provision. However, details of how this occur in practice are yet to emerge. Deferred Payments - due to the present housing market, clients are finding it more difficult to sell their home to fund residential care. The risk is that the Council will be obliged to extend its deferred payments provision to cover these costs until these homes are sold. Homecare Commissioning - current contracts for homecare commissioning end in 2009 and 2010 thus requiring a re-tendering exercise. There is a risk that new contracts costs will not be able to be contained within current resources. 51

11 Children s Service DSG lower than anticipated allocation (see CRC 22 July for detailed explanation). SEN Transport the two main contractors have requested rises above RPI. An increase in the number of routes has risen, as has the number of pupils requiring individual transport and wheel chair accessible vehicles. Pupil Referral Unit demand for these places is likely to continue and it is likely to be a growth item in 2009/10. Complex Needs two key factors for the increase predicted income is a rise in the number of out of borough pupils and changes to the level of support for individual pupils. 3 & 4 Year old payments - estimates for January 2009 claims result in an overspend of approximately 70,000 An increase in the average number of children being funded has increased. A range of checks will continue to ensure that providers are only paid the amount that they are eligible for. Children in Care The possibility of more children entering the care system and failure to meet targets on foster parent recruitment, which may result in higher unit costs. PSCIP Impact of land valuation and current economic uncertainty may result in a lack of capital resources in future years to implement the primary schools capital investment programme (PSCIP) and failure to achieve quality re-builds within budget. School Places - Demand for services and school places increase as a result of demographic changes and economic climate impacting upon parental choice. Financial pressures may emerge in future years and further analysis will over time be required. 52

12 Environment & Transport Although fuel costs have fallen in recent weeks they are still significantly above the budget level and thus pose a risk of overspending in areas such as Refuse and Street Cleansing that are dependent on vehicles. Replacement of Waste Performance & Efficiency Grant with a new London Waste & Recycling Fund following the most recent meeting of the London Waste and Recycling Board it now looks increasingly unlikely that any grant will be allocated in Revenue implications are shown elsewhere in this report and capital options are currently being assessed. Street Lighting PFI - there are indications that the funders may be reviewing their position in the current economic climate. Officers are meeting with contractors in order to demonstrate how they can meet their milestones and avoid contractual deductions which would provide reassurance to contractors and funders. Aerodrome Road: Negotiations with the prime contractor are ongoing. The Councils expert has fully examined 2 of the 4 contractual claims received from Norwest Holst and the Council has responded to the contractor as appropriate. However, the contractor has indicated that they would like to evaluate all responses at the same time. At this time it is envisaged that the additional cost will be in the range indicated in the exempt report to this Committee. 53

13 Resources Energy costs are currently being forecast to increase by up to 40% over the forthcoming months. Projects currently being developed for potential inclusion in the capital programme at a later date include an asset management system and a shared data centre. The South Friern library development is likely to overspend by 85,000 within this financial year, owing to increasing costs to deliver the building specification (developed and costed in 2006). The Library Service and Asset Management have reviewed the specification and have cut many non-essential elements of the building specification. Further reductions to the building specification could adversely impact the quality of service provided to customers. The premises fit out is currently out to tender and it is this element of the project that is anticipated to overspend. The South Friern library site is part of a redevelopment project, initiated in December 2006 and with the site itself due to be handed over to the Council on 5th January Asset Management are comparing the shell to be delivered to Barnet with the shell specification, to ensure that work required to be completed by the developer is finished, and no cost of works that should be incurred by the developer are charged to the Council. The current budget for the construction work and fitting out of the library contains 350,000 capital funding (of which 50,000 section 106 money to be provided by the supplier on completion and sign-off of the shell. Central Expenses Council deposits in Icelandic Banks the maximum impact of this risk is that the Council is unable to recover any of monies deposited, though this is not currently expected to be the outcome. Actions being taken to mitigate this risk were set out in detail in the report to Cabinet on 23 October 2008, and through the Chief Finance Officer s attendance at creditors committee meetings. The unprecedented events in the global financial market are impacting on all areas of the economy including local government. Continuing variations in interest rates will impact on short term borrowing and investment and long term debt (including Lender Option Borrower Option loans). Falling investment values will impact on pension funds and increase pressure on employer s contributions to bridge resultant funding shortfalls. This is a longer term pressure. Council tax collection may become increasingly difficult and result in tax shortfalls. Exemptions may increase reducing the taxable capacity of the council. Again, these are longer term risks. Lower levels of capital receipts should developments slow and land and property prices contract. Increasing demand for council services as more people face financial 54

14 hardship. Variations in the capital programme will impact on financing costs. The central levies budget of 22m may be subject to volatility in the future which cannot be controlled by the council. The Central Contingency may be insufficient to meet all demands that may be placed upon it. In particular, there is no provision for the 2008/9 pay award to go above 2.5% which is the cost of the employer s final offer pending the result of arbitration. The council may be unable to capitalise all redundancy costs where they exceed government authorisation. Recommendation 1.4: To require Directors to monitor their financial risks regularly and ensure that appropriate actions are taken to mitigate these risks wherever possible. 9.5 Debt Management The efficient collection of debt is an important component in ensuring the financial health of the Council. In recognition of this the Council has focussed on improving its performance in this area, which in turn has led to significant improvements in debt collection. Total debt as at 30 November 2008 was m (net of write-offs) a reduction of 0.956m from the corresponding figure for Of the total debt to 30 November 2008, 6.267m (44%) relates to invoices under 30 days old and 7.931m (56%) over 30 days. Appendices A(i) and A(ii) show a graphical representation of Debt by Department and True Aged Debt Barnet s two most significant debtors are Barnet Homes and Barnet PCT. Barnet Homes has a total of 0.466m outstanding as at 30 November 2008, up from 0.166m at this point in November Barnet PCT has a total of 1.414m outstanding as at 30 November 2008, up from 1.351m at this point in November Barnet Homes collect leaseholder contributions to help finance improvements and major works in the council s social housing stock. Over the past year significant improvements in performance have been realised as long term major works debt has been reduced whilst overall collection has increased as exemplified in the table below. Table 7 - Leaseholder - Major Works Debt Comparison Age of Debt As at ( 000) As at ( 000) Under 6 months 2, Between 6 months & 1 year 681 1,167 Over 1 year Total 3,330 2,401 55

15 9.5.4 The current position on Adult Services is reported in a briefing note at Appendix A(iii). Recommendation 1.5: To note the Council s debt management position. 9.6 Creditor Payment Performance Overall 95.9% of undisputed invoices were paid within 30 days in the second quarter of 2008/09. Although very slightly lower than the 96.8% achieved during both the second quarter of 2007/08 and for 2007/08 as a whole, this rate compares very favourably with the 81% and 92.5% figures in and respectively. Recommendation 1.6: To note the Council s creditor payment performance. 9.7 Tax Collection As at 30 November, 2008/09 Council Tax collection is 75.46%, up by 0.91% from 74.55% at the equivalent point last year. In cash amounts this is million compared to million collected at the same time last year As at 30 November Business Rates were 77.34% down by 2.12% from 79.46% at the equivalent point last year. In cash amounts this is million compared to million collected at the same time last year. Recommendation 1.7: To note the Council s tax collection performance. 9.8 Reduction in parking charges over Christmas A proposal is being developed to charge reduced rates for off and on street parking in the borough from 20 December to 4 of January. The cost of this proposal is estimated at 170,000. It is proposed that this will be funded by the 5,000 VAT reduction in 2008/09, with the remaining amount ( 165,000) funded by the special parking account (SPA) reserve. Recommendation 1.8: To draw down 165,000 from the SPA reserve for a one-off reduction in parking charges. 9.9 Future Shape of the Council CRC (17 June 2008) approved an earmarked reserve of 400,000 for the Future Shape review. Authorisation is requested to regularly draw down from this reserve to offset the expenditure incurred on Future Shape. Recommendation 1.9 (a): To authorise the regular draw down from the earmarked reserve in the accounts for the Future Shape programme Cabinet (3 December 2008) approved 250,000 from balances to fund the next phase of the Future Shape programme. 56

16 Recommendation 1.9 (b): To note the approval of 250,000 funding from balances for the next phase of the Future Shape programme Capitalisation direction severance payments and single status A request for capitalisation has been made to cover severance and single status payments totalling million. Capitalisation is dependent on receiving the required direction from Government. Should Barnet fail to receive the required direction, the entire sum would be funded by balances. Recommendation 1.10: To note the further million risk to balances in the event of not receiving a capitalisation direction Interest benefit The position regarding interest receipts and capital financing costs has been reviewed in the light of the two recent reductions in Bank of England base rate and revisions to the method of calculating the minimum revenue provision based on balance sheet items rather than in year borrowing requirements. As a result, a further 3m saving is forecast on top of the 1m reported to CRC on 2nd September 2008, making a total saving of 4m in 2008/9. This saving also includes full allowance for any irrecoverable interest on Icelandic Bank deposits CRC is recommended to set aside this 4m and any further interest benefit achieved at outturn into a provision to meet reductions in interest receipts in 2009/10 that are now inevitable given the two recent base rate reductions by the Bank of England. Recommendation 1.11: That the current 4m forecast interest benefit and any further benefit in the outturn be set aside in a provision to meet any shortfall on budgeted interest earnings in 2009/ Growth Area Funding Barnet s refreshed bid for Growth Area Funding Round 3 was just under 55 million. Although this was ambitious set against a limited national pot of 264 million which was over 3.5 times oversubscribed, Barnet received the highest award in London and is in the top six in the country. The total award for was over 12m million based on a number of area bids and priorities for which Colindale was joint top priority It is recommended that Officers develop proposals for the allocation of this funding to be brought to this Committee at a later date. Recommendation 1.12: That Officers will develop proposals for the allocation of Growth Area Funding to be brought to a future CRC. 57

17 9.13 Environment & Transport loss of WPEG grant Waste Performance Efficiency Grant (WPEG) of 380,000 is included in the 2008/09 budget. This grant is now very unlikely to be received. The revenue effect of this lost grant for 2008/09 is estimated at 250,000 due to the slow start of the New Recycling Contract. Recommendation 1.13: To authorise 250,000 from balances to mitigate for the loss of Waste Performance Efficiency Grant (WPEG) grant Environment & Transport street cleansing During October and November 2008, the Cleansing service deployed four additional crews to respond to accumulation of leaves throughout the Borough. The total cost of this work was 103,000 and as this work was not included within the original budget it is recommended that an equivalent amount is allocated from balances. Recommendation 1.14: To authorise 103,000 from balances to fund the leaf clearance work carried out in October and November Area Based Grant Working Neighbourhoods Funding Area Based Grant (ABG), which succeeded the former Local Area Agreement (LAA) block fnding streams, is paid directly to the Council without conditions for its use. For 2008/09 it was allocated to support activity that was formerly funded by ring fenced funding streams, with uncommitted sums held in balances. Cabinet Resources Committee agreed on 28 April 2008 that ABG monies be held centrally. LAA leads were advised that targets needed to be achieved using existing resources but that business cases could be made for additional short term funding to achieve targets. Funding of 50,000 is now required to support delivery of LAA target 153 (reducing the number of people claiming out of work benefits) and funding of 69,650 is required for LAA target NI 195 (reducing levels of graffiti). Recommendation 1.15: To authorise 119,650 drawdown of contingency for delivery of LAA targets 153 and LIST OF BACKGROUND PAPERS 10.1 None. CFO: HG Legal: SCS 58

18 Appendix A(i) - Debt by Department Value ( ) Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Month Adult Services Education, Leisure, Youth, Culture Planning, Highways & Design Environment Other Schools Payroll 59

19 Appendix A(ii) - True Aged Debt 2008/09 Under 30 day Over 30 day Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 60

20 Appendix A (iii) Adult Social Services Debt Management 1. Client Invoicing Summary of Position As at 10 December 2008, the key issues relating to the issuing of invoices to Adult Social Services clients are as follows: Meals at Home Clients have now been billed for meals received up to 31 st October. There continue to be very few enquiries/complaints received from clients. Approximately 450 clients receive meals at home. Homecare There has been a further improvement over the position reported last month. Officers have reconciled accounts with all providers to at least September and hence billing is now at the most up to date situation that it has been over the past 21 months. There are roughly 450 clients charged for homecare under the Council s fairer charging policy. Other Services There are no significant delays with regards the invoicing for Residential care or Respite care. 2. Debt Secured Using Charges Placed Against Clients Properties As at 8 December 2008, 80% of residential and nursing home clients with debts over 5,000 who own homes have had charges placed against their properties. All charges include a clause which automatically enables the charged amount to increase as the debt owed increases. This enables any debt secured against charges to be settled from the proceeds of the sale of that property, or against the client s estate on death. It should be noted that current legislation does not enable Order for Sale prior to the death of the client. Currently the total debt outstanding that is secured against clients properties is 1.06m, out of a potential total of 1.32m, and is accruing at a rate of 15,000 per month. The current caseload consists of 32 cases with debts over 5,000 which potentially may be subject to property charges. A review of these cases will be completed by end of January In cases where the executors of the deceased clients are judged to be cooperating with the Council, probate process is allowed to take its course with the debt settled once the property has been sold. In such cases, no attempt is sought to 61

21 artificially speed up the process by invoking the Council s right to order a sale. However, there are three current cases where executors have not been cooperating These have been escalated to the Council s legal department with a view to obtaining settlement. As part of their annual review of clients contributions to costs, the Adult Social Services Income and Assessment team assess the value of the property against the secured charge. If the level of charge equals the value of the property the case will be reassessed excluding property from the assessment. This will result in a reduction in the clients contributions and the amount billed to those clients by the Council. 62

22 Prudential Indicator Monitoring 2008/ /09 Budget Forecast Capital Expenditure Non HRA 90, ,687 HRA (applies only to housing authorities) 33,843 31,417 Ratio of financing costs to net revenue stream % % Non HRA 0.25 (0.13) HRA (applies only to housing authorities) Incremental Impact on Band D Council Tax Capital Financing Requirement Non HRA 142, ,052 HRA (applies only to housing authorities) 80,327 62,881 Authorised limit for external debt Borrowing 259, ,407 Other long term liabilities 90,000 90,000 Total 349, ,407 Operational boundary for external debt Borrowing 259, ,407 Other long term liabilities 70,000 70,000 Total 329, ,407 Upper limit for fixed rate exposure Net principal re fixed rate borrowing / investments 100% 100% Upper limit for variable rate exposure Net principal re variable rate borrowing / investments 30% 30% Appendix B Fixed Rate Maturity Borrowing Upper limit Lower limit Under 12 months 20% 0% 12 months and within 24 months 25% 0% 24 months and within 5 years 30% 0% 5 years and within 10 years 50% 0% 10 years and above 95% 25% 63

23 Glossary Capital expenditure this prudential indicator shows the estimate of capital expenditure for the financial year. Ratio of financing costs to net revenue stream this prudential indicator shows the estimated annual revenue costs of borrowing (net interest payable on debt and the minimum revenue provision for repaying the debt), as a proportion of annual income from government grants and council tax payers. Incremental impact on Band D Council Tax this prudential indicator reflects the estimated annual increase in Band D Council Tax as a result of new proposed capital spending. Capital Financing Requirement (CFR) this prudential indicator determines the authority s underlying need to borrow for capital purposes. Schemes that have no specific funding source increase the authority s underlying need to borrow hence the CFR increases. Authorised limit for external debt this prudential indicator shows the absolute limit of borrowing based upon the authority s plans and includes sufficient headroom for adverse cash movements. Operational boundary for external debt - this prudential indicator is based upon the authority s plans and shows the maximum level of external debt. Limit for fixed and variable interest rate exposure this prudential indictor shows the limit that the authority will be exposed to both fixed and variable interest rate movements. Maturity structure of borrowing this prudential indicator shows the amount of borrowing that will mature within certain time bands in the future. This indicator is designed to ensure that authorities spread the maturity dates of their loans to avoid large maturities occurring at similar times. 64