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ITEM EX5 - SUPPLEMENT A

EXECUTIVE – 19 MARCH 2002

BUDGET MONITORING

VIREMENT ARRANGEMENTS

Supplementary Report by Director for Business Support & County Treasurer

1. Under the Constitution the Council are required to specify the extent of virement within the approved budget which may be undertaken by the Executive. Any other changes to the budget are reserved to the Council, other than any changes necessary to ensure compliance with the law, ministerial direction or government guidance. The Executive will need to make recommendations to the Council on 2 April as to the virement limits which should be adopted.
2. Virement for these purposes is taken to include not only the transfer of budget provision within or between budget heads (ie the expenditure heads specified in the budget as approved by Council) but also the transfer of funds from balances (or contingency provision, if such exists) by way of a supplementary estimate.

Arrangements under the Old Committee System

3. Under the former administrative arrangements, virements were approved either by committee or chief officers depending on the nature of the proposals. Committee approval was necessary where proposals represented a policy change (defined as a permanent virement which might significantly affect the current configuration of services). All supplementary estimate requests were put forward via the programme committee to the Strategy & Resources Committee for approval. Such approvals were sought via the Quarterly Financial Report or the Provisional Outturn Report.

Proposed Arrangements

4. It is suggested that in the context of the new political management arrangements it would be appropriate (and consistent with the responsibilities of the full Council in respect of the policy framework) if the power to authorise permanent virements as previously exercisable by committee were now to be reserved to the full Council. Thus, the approval of Council would be required for any permanent virement which:

1. would significantly affect the current configuration of services;
2. would imply a commitment in future years beyond any agreed allocations;
3. involves a transfer of funds between capital and revenue budgets; or
4. is otherwise the subject of a requirement to that effect notified by the Director for Business Support & County Treasurer to the Leader of the Council.

5. These provisions would be subject to annual review as part of the budget setting process.
6. For virements which under these proposals would remain within the province of the Executive, it is considered that – as with the previous arrangements – there should be some practical flexibility to enable in-year virements to be put into effect without the necessity for reference to the full Executive for approval. It is accordingly suggested that the relevant service Director and the Director for Business Support & County Treasurer (or his nominated officer) should be empowered to effect individual virements up a limit of £0.25m, subject to the agreement of the relevant Executive Member(s) in each case. (Work on the re-formatting of the budget is proceeding on the basis that it should reflect the "paired" Executive Member responsibilities, or the single Member in the case of Community Safety, and this will facilitate the clear identification of the relevant Executive Member(s) for the purpose of these provisions.)
7. Any proposed virement above the specified limit, or about which the relevant Executive Members have concerns, would need to be referred to Executive for approval.

Environmental Services Budget

8. The original report (EX5) referred to the need for a decision to be made on the final allocation of expenditure pressures on the Environmental Services budget in accordance with the report considered by the Environment Scrutiny Committee in December. This issue needs to be considered in accordance with the virement rules set out above (or whatever the Council may agree in their place.) The details are set out in the annexed table.(download as .rtf file)
9. This is in essence the rectification of an oversight, but the adjustments are considered to fall outside the authority recommended for the Executive to approve; they therefore need to be recommended to Council to agree.

Recommendations

10. The Executive is RECOMMENDED to:

Chris Gray
Director for Business Support & County Treasurer

Background Papers Nil

Contact Officer Jenny Hydari Tel: (01865) 815401

March 2002

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