Agenda item

The Committee considered the Financial Monitoring Report for Period 8 which summarised the projected outturn position for the Council’s General Fund (GF) revenue account and Housing Revenue Account (HRA), based on the latest actual and accrued data.

The revised budget had been adjusted to reflect the changes agreed to bring the budget back into a balanced position.  Officers were projecting an underspend within services on the GF revenue account of £0.467 million, which included specific reserves transfers.  Corporate adjustments, provisions and external interest receivable, was forecast to overachieve by £0.629 million to give an overall favourable variance of £1.096 million.  Any surpluses or deficits would impact reserves at year end.

Within the forecast of external interest was a budget of £0.800 million which was expected to be received from North Downs Housing (NDH), which had been highlighted as being a risk based on past performance, and a provision of £0.300 million had been included to reduce the risk to which the Council was exposed.  However, the Committee noted that latest information available had indicated that the monies due from NDH would be received.

Officers were projecting an overspend on the HRA of £0.616 million, details of which were highlighted in the report.

The Orchard housing management system contained a number of jobs which had not been invoiced and therefore not shown in Business World. 

GF reserves were forecast to be £34.819 million at year end, of which £31.622 million were earmarked and £3.198 million were available and classed as usable, although this excluded the GF working balance.

Progress against the capital programme was underway, and the Council was expected to spend £81.85 million on its capital schemes by the end of the financial year against a budgeted expenditure of £228.66 million. This forecast supported the report of the Interim Director of Finance reducing the Capital programme by £99.6 million.

The Committee was reminded that the Month 6 report considered at the last meeting (29 November 2023) had contained a number of errors.  A corrected report had been circulated to the Committee on 1 December.  For transparency purposes, the corrected report was attached, for information, as Appendix 5 to the current report.

The Committee’s attention was drawn to an error in the table in paragraph 10.1 of the report showing the variances within each directorate’s spending.  The total variance should have indicated a favourable variance, or an underspend, of £467,000.

The Lead Councillor for Finance and Property, Councillor Richard Lucas commented that this monitoring report was a significant improvement on previous reports, as it helped officers to better manage their operations, and associated risks and improved transparency, so that the Committee had greater visibility of what was going on. 

During the debate, the following points were raised:

·      Concern regarding the volatility in the reporting of financial monitoring from one meeting to the next, for example the Month 6 monitoring report had indicated a projected £200,000 surplus on the General Fund at year end, and this report had indicated that the surplus would be £1.1 million.   It should be expected that such volatility should reduce significantly towards the end of the financial year.  

·      In response to a question about the risk associated with the General Fund forecast, in particular around the external interest receivable, which was now £1.3 million, the Committee noted that external interest came from a number of different sources, some as bank interest, which was easy to predict, but other sources were only declared on a quarterly or half yearly basis.  However, officers were getting better at how to investigate and determine those figures and it was hoped that would improve going forward. 

·      Having this level of monthly monitoring and being able to see month by month, what was happening through financial monitoring, it was not that surprising to see so much volatility.  The information provided in the Summary of Directorate Variances was welcomed. The report also identified areas which were clearly going to need a greater focus going forward e.g. assets and property and planning and development.

Having considered the report, the Committee

RESOLVED: That the Council’s latest financial monitoring for Month 8 of the 2023-24 financial year be noted that the Committee’s comments and observations referred to above be passed to the Executive.

Reason:

To ensure that Councillors and executives fulfil their responsibilities for the overall financial management of the council’s resources.