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Financial Restrictions regarding 2010/11 Budget - READ IMMEDIATELY

 

This message was sent with High importance.

Sent: 23 July 2010

 

To: Managers Circulation

Cc: CEMB Access; Labour Councillors; Conservative Councillor; Lib Dem Councillors; Independent Councillor

 

Colleagues,

 

I write to advise you that our monthly budget monitoring is predicting a significant in-year overspend. The size of the predicted overspend has been increasing month on month and now stands at a forecast £10m. We are also expecting, and preparing for, reductions in our government grant funding in future years as announced in the recent budget, this is in addition to in-year reductions in grants already imposed. In these circumstances I, as Chief Executive, and Julie Parker as Director of Corporate Resources (and the Council’s Section 151 officer) have no option but to immediately take action to reduce spending.

 

Whilst analysis of the budget position shows that much of the predicted overspend is coming from demand led budgets we have a responsibility to ensure we stay within the approved budget. We are both aware of the efforts being made by many of you to keep within budget but there are some measures we must now apply across all budgets in order to stabilise the position.

 

The measures set out below will come into immediate effect and all managers and budget holders are required to comply with these instructions.

 

  1. A Council wide recruitment freeze for permanent, agency and consultancy staff is to be implemented immediately. Any exceptions to be agreed by your Director who will then consult with Stuart Young.

  2. All orders for goods and services up to a value of £1k are to be approved by Assistant Directors/Business Unit Heads (i.e. those reporting to a Director), above this level, Director authorisation is required.
     
  3. The immediate suspension from use of all Council purchase cards. Exceptions can be agreed by individual Directors where service need requires use of any card.

  4. 10% will be ‘top sliced’ from all supplies and services budgets. The resulting budget will beheld within directorates. Any expenditure against this contingency can be agreed in exceptional circumstances by the relevant Director.

 

Spending on the following areas must cease immediately:-

 

    * Staff Travel including taxi’s

    * Hire of external venues

    * Newspapers, periodicals and magazines

    * Furniture and Fittings

    * Equipment

    * Refreshments

    * Events, conferences and away days

    * Employment of external solicitors

    * Journals and subscriptions (memberships and magazines)

    * Promotional advertising/merchandise including mugs, pens, balloons

    * Market research

    * Use of couriers

    * Plants, flowers, balloons and other decorations

    * Producing glossy publications

    * Subscriptions

    * Non-contractual staff subsistence

    * Exceptions to this moratorium can only be agreed by Assistant Director/ Business Unit heads or Directors.

 

 

 

A more detailed technical note to assist managers in the implementation of this will follow shortly but I thought it was important to advise you of the action that you need to take with immediate effect.

 

You need to be aware that these measures relate to all payment methods the Council currently uses including petty cash and bank imprest accounts.

 

We are extremely grateful, in advance, for your compliance with these measures and we are hopeful that we can return to the normal operating rules in due course.  This will depend on clear evidence from future budget monitoring that the rate of spend has reduced sufficiently to regain our confidence that we can balance this year’s budget.

 

These are very challenging times and the measures are absolutely necessary as we know we face significant financial reductions over the next 2/3 years.

 

 

 

Kevin Crompton                                           Julie Parker

 

Chief Executive                                            Director of Corporate Resources (Section 151 Officer)