Agenda, decisions and minutes

An apology for absence was submitted on behalf of Councillor Jan Harwood.

An apology for absence was submitted on behalf of Councillor Jan Harwood.

In accordance with the local Code of Conduct, a councillor is required to disclose at the meeting any disclosable pecuniary interest (DPI) that they may have in respect of any matter for consideration on this agenda.  Any councillor with a DPI must notparticipate in any discussion or vote regarding that matter and they must also withdraw from the meeting immediately before consideration of the matter.

If that DPI has not been registered, the councillor must notify the Monitoring Officer of the details of the DPI within 28 days of the date of the meeting.

Councillors are further invited to disclose any non-pecuniary interest which may be relevant to any matter on this agenda, in the interests of transparency, and to confirm that it will not affect their objectivity in relation to that matter.

There were no disclosures of interest.

There were no disclosures of interest.

To confirm the minutes of the meetings of the Executive held on 23 and 25 April, and on 21 May 2019.

The Executive approved, as a correct record, the minutes of the meetings held on 23 and 25 April, and on 21 May 2019.  The Chairman signed the minutes.

The Executive approved, as a correct record, the minutes of the meetings held on 23 and 25 April, and on 21 May 2019.  The Chairman signed the minutes.

There were no announcements from the Leader.

There were no announcements from the Leader.

Recommendation to Council (23 July 2019):

(1)         That the Treasury Management Annual Report for 2018-19 be noted.

(2)         That the actual prudential indicators reported for 2018-19, as detailed in Appendix 1 to the report submitted to the Executive, be approved.

Reason:

To comply with the Councils’ treasury management policy statement, the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on treasury management and the CIPFA Prudential Code for Capital Finance in Local Authorities.

The Executive considered the Capital and Investment Outturn Report for 2018-19, which had included:

·        a summary of the economic factors affecting the approved strategy and counterparty update

·        a summary of the approved strategy for 2018-19

·        a summary of the treasury management activity for 2018-19

·        compliance with the treasury and prudential indicators

·        non-treasury investments

·        capital programme

·        risks and performance

·        Minimum Revenue Provision (MRP)

·        details of external service providers

·        details of training

The Executive was informed that total expenditure on the General Fund capital programme in 2018-19 had been £37.7 million, which was less than the revised budget by £99.6 million.  Details of the revised estimate and actual expenditure in the year for each scheme were set out in Appendix 3 to the report. Although the budget for Minimum Revenue Provision (MRP) had been £1.2 million, the outturn had been £795,190, due to slippage in the capital programme in 2017-18.

Councillors noted that the Council’s investment property portfolio stood at £161 million as at 31 March 2019.  Rental income had been £9 million, and income return was 6.3% against the benchmark of 4.8%.

The Council’s cash balances had built up over a number of years, and reflected the strong balance sheet, with considerable revenue and capital reserves.  Officers carried out the treasury function within the parameters set by the Council each year in the Capital and Investment Strategy.  As at 31 March 2019, the Council held £97.3 million in investments.

The Council had borrowed short-term from other local authorities for cash flow purposes, but did not take out any additional long-term borrowing during the year.  The Council had £212.9 million borrowing at 31 March 2019, of which £20 million was short-term borrowing for cash purposes.

The report confirmed that the Council had complied with its prudential indicators, treasury management policy statement, and treasury management practices for 2018-19. 

The Executive noted that the slippage in the capital programme had resulted in a lower Capital Financing Requirement than estimated. Interest paid on debt had been lower than budget, due to less long-term borrowing taken out on the General Fund because of slippage in the capital programme.

The yield returned on investments had been lower than estimated, but the interest received had been higher due to more cash being available to invest in the year – a direct result of the capital programme slippage.

The report had also been considered by the Corporate Governance and Standards Committee at its meeting on 13 June 2019.  The Committee’s comments on this matter were included on the Supplementary Information Sheet circulated at the meeting.  The Committee had commended the adoption of the recommendation in the report by the Council on 23 July 2019.

Discussion on the report queried whether the Council had a policy on Ethical, Social and Governance (ESG) in relation to investments and, in particular, whether the holding of a petrol station with the Investment property portfolio was appropriate. 

Having considered the report, the Executive

RECOMMEND:

(1)         That the Treasury Management Annual Report for 2018-19 be  ...  view the full minutes text for item EX11

Decision:

That the Council’s final revenue outturn position on the General Fund for 2018-19 be noted, and that the decision, taken under delegated authority, to transfer £1.85 million to the Invest to Save reserve to support the delivery of the Future Guildford Transformation Programme, be endorsed.

Reasons:

·        To note the final outturn position and delegated decisions taken by the Chief Finance Officer, which have been included within the statutory accounts the Chief Finance Officer signed at the end of May.

·        To facilitate the on-going financial management of the Council.

Alternative options considered and rejected by the Executive:

None

Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:

None

The Executive received a report setting out the final position on the General Fund and the Collection Fund revenue accounts, for the 2018-19 financial year. 

Overall, the outturn on the General Fund had been £1,851,116 less than originally budgeted, which reflected the Council’s continued sound financial management.

The report had set out the major reasons for the variance.  At service level after adjustment for movements to and from reserve, the projected outturn was £168,000 higher than the latest estimate.

Net income from interest receipts had been £1,641,694 more than estimated and the minimum revenue provision (MRP) for debt repayment had been £405,453 lower than estimated.

In accordance with the authority delegated to the Chief Finance Officer, in consultation with the Leader of the Council and the Lead Councillor for Finance and Asset Management, the underspent balance had been used to make a transfer to the Invest to Save Reserve to support the transformation agenda.

Details of the closing balance on all the Council reserves were set out in the report, together with the ongoing policy for each.

The Executive noted that 2018-19 had been the fourth year of the Business Rates Retention Scheme (BRRS) and it had continued to cause volatility in the Council’s accounts.  The Business Rates balance on the Collection Fund was particularly susceptible to movements in the number and value of appeals that businesses had made against their rateable values.  The Council had no control over these appeals, and had limited information from the Valuation Office to help assess the potential impact. 

The Executive was advised that there was an overall deficit on the Collection Fund of £4.9 million, as detailed in the report.

The outturn position had been included in the Statement of Accounts signed by the Chief Finance Officer on 31 May 2019, which would be subsequently audited by the Council’s external auditor, Grant Thornton.  The Executive noted that the draft Statement of Accounts had been posted on the Council’s website, and that the audited accounts would be reviewed by the Corporate Governance and Standards Committee at its next meeting on 25 July 2019.

The report had also been considered by the Corporate Governance and Standards Committee at its meeting on 13 June 2019.  The Committee’s comments on this matter were included on the Supplementary Information Sheet circulated at the meeting. 

Having noted that the Corporate Governance and Standards Committee had supported the adoption of the recommendation in the report, the Executive

RESOLVED: That the Council’s final revenue outturn position on the General Fund for 2018-19 be noted, and that the decision, taken under delegated authority, to transfer £1.85 million to the Invest to Save reserve to support the delivery of the Future Guildford Transformation Programme, be endorsed.

Reasons:

·        To note the final outturn position and delegated decisions taken by the Chief Finance Officer, which have been included within the statutory accounts the Chief Finance Officer signed at the end of May.

·        To facilitate the on-going financial management of the Council.

Decision:

That the final outturn position on the Housing Revenue Account for 2018-19 be noted and that the decision, taken under delegated authority, to transfer £2.5 million to the reserve for future capital programmes, and £7.85 million to the new build reserve from the revenue surplus of £10.35 million in 2018-19, be endorsed.

Reason:

To allow the Statutory Statement of Accounts to be finalised and subject to external audit, prior to approval by the Corporate Governance and Standards Committee, on behalf of the Council.

Alternative options considered and rejected by the Executive:

None

Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:

None

The Executive received a report setting out the final position on the Housing Revenue Account (HRA) for the 2018-19 financial year.  The HRA recorded all the income and expenditure associated with the provision and management of Council owned residential dwellings in the Borough. 

The report had set out the actual level of revenue spending on day-to-day services provided to tenants recorded in the HRA in 2018-19.

Rental income from dwellings had been £80,070 below the estimate. The actual net cost of revenue services in 2018-19 had been £369,394 lower than the budget of £14,406,490.  This variation represented 1.15% of the total turnover of £31.991 million.  The final outturn (subject to audit) had shown a surplus for the year of £10.35 million, compared to a budgeted surplus of £9.746 million, after taking into account various accounting adjustments.  The HRA working balance at year-end remained at £2.5 million.

In accordance with the authority delegated to the Chief Finance Officer, in consultation with the Lead Councillors with responsibility for Housing and Finance, the surplus had been used to make a transfer of £2.5 million to the reserve for future capital programmes, with the balance of £7.85 million being transferred to the new build reserve.

During consideration of this matter, Mr Alex Stuart asked the following question:

“The Government has recently announced changes to Section 21 of the Housing Act which currently allows landlords to evict tenants without any just cause just simply give two months’ notice to evict them.  Will the Council commit to not using this procedure against its own tenants and will they commit to enforcing this against private landlords ensuring they don’t use this measure in the future?”

The Chairman indicated that a written response to Mr Stuart’s question would be sent to him in due course.

Having noted that the report had also been considered by the Corporate Governance and Standards Committee at its meeting on 13 June 2019, and that Committee had supported the adoption of the recommendation in the report, the Executive

RESOLVED: That the final outturn position on the Housing Revenue Account for 2018-19 be noted and that the decision, taken under delegated authority, to transfer £2.5 million to the reserve for future capital programmes, and £7.85 million to the new build reserve from the revenue surplus of £10.35 million in 2018-19, be endorsed.

Reason:

To allow the Statutory Statement of Accounts to be finalised and subject to external audit, prior to approval by the Corporate Governance and Standards Committee, on behalf of the Council.