Agenda item

The Committee considered a report that set out the financial monitoring position for period 8 (April to November 2017).

The report summarised the projected outturn position for the Council’s general fund revenue account, based on actual and accrued data for this period. Officers were projecting a reduction in net expenditure on the general fund revenue account of £1,263,353. This was the result of a combination of factors, which included a 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 £9.15 million to the new build reserve and £2.5 million to the reserve for future capital at year-end, which had been £918,479 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 expected to spend £33.3 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 £20.2 million by 31 March 2018, against an estimated position of £87.7 million, which was due to slippage on both the approved and provisional capital programme.

The Council held £145.7 million of investments and £242.2 million of external borrowing as at 30 November 2017, which included £193 million of HRA loans.  Officers confirmed that the Council had complied with its Prudential indicators in the period, which had been set in February 2017 as part of the Council’s Treasury Management Strategy.

During the debate, the Committee made a number of comments, including:

·        Clarification on what might constitute ‘exceptional circumstances’ in the context of the sale of external investments at a loss (para 6.10 of the report) The Chief Finance Officer confirmed that were no set criteria as such but any decision in contemplation of a sale, would be taken in consultation with the Council’s Treasury Management advisors.

·        The impact of the slippage on the capital programme, with funding for major schemes being carried forward to 2018-19 or future years.  The Chief Finance Officer confirmed that such slippage impacted positively on the revenue account with less being paid by way of MRP to finance the repayment of debt and increased income from interest. However, slippage on the capital programme could have a negative impact reputationally for the Council in terms of deferred delivery of key corporate priorities.

Having considered the report, the Committee

RESOLVED: That the results of the Council’s financial monitoring for the period April to November 2017 be noted.

Reason:

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