Agenda item

The Committee considered a report that set out the financial monitoring position for the period April to July 2017.

The report summarised the projected outturn position for the Council’s general fund revenue account, based on actual and accrued data for the period April to June 2017, with the outcome of budget monitoring on key services for the period April to July 2017 overlaid to form a hybrid report.  Officers were projecting a reduction in net expenditure on the general fund revenue account of £560,823 (representing 1.26% of the Council’s original net budget). This was the result of a combination of factors, which included an increase in interest on investments, reduction in employee expenditure across all services, higher than assumed levels of grant support and a reduction in the statutory Minimum Revenue Provision (MRP) charge to the General Fund to make provision for the repayment of past capital debt.  This lower than budgeted MRP charge reflected a re-profiling of capital schemes, which also had a positive impact on the level of cash balances and assumed external borrowing costs, which had combined to produce higher than budgeted net interest receipts.

A surplus on the Housing Revenue Account, due to lower staffing and repairs and maintenance costs would enable a projected transfer of £8.76 million to the new build reserve and reserve for future capital at year-end. This transfer was £537,128 higher than budgeted.

Officers were making progress against significant capital projects on the approved programme as outlined in section 7 of the report.  The Council was now expected to spend £76.1 million on its capital schemes by the end of the financial year.

The Council’s underlying need to borrow to finance the capital programme was expected to be £52 million by 31 March 2018, against an estimated position of £87.7 million. The lower underlying need to borrow was a result of slippage on both the approved and provisional capital programme, as detailed in the report.

The Council held £144.1 million of investments and £250.3 million of external borrowing as at 30 June 2017, which included £193 million of Housing Revenue Account loans.  Officers confirmed that the Council had complied with its Prudential indicators in the period, which were set in February 2017 as part of the Council’s Treasury Management Strategy.

The Lead Councillor for Finance and Asset Management commented that the report reflected the Council’s strong financial position, together with the ambitious Corporate Plan and capital programme demonstrating the Council’s commitment to investing in the Borough.

In relation to the major service variations and, in particular, the higher net cost of £625,000 associated with The Village, the Committee noted that best projections for income forecasts provided by consultants at the beginning of the Village project had been based on unit rentals in the region of £400 per week with 90% occupancy, operating 364 days in the year.  Unfortunately, those projections could not be achieved.  More details on the financial performance of The Village project would be presented in separate reports to Overview and Scrutiny Committee on 14 November, Executive on 28 November and full Council on 5 December 2017.

Having considered the report, the Committee

RESOLVED:

That the results of the Council’s financial monitoring for the period April to June 2017, and the update on key services for the period April to July 2017, be noted.

Reason for Decision:

To allow the Committee to undertake its role in scrutinising the Council’s finances.