Agenda item

The Committee considered a report that set out the financial monitoring position for period April to November 2018.

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 £792,095. This was the result of 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. At service level, the projected outturn was £294,007 higher than the latest estimate once adjusted for items either funded from reserve or transferred to reserve.

A surplus on the Housing Revenue Account would enable a projected transfer of £7.03 million to the new build reserve and £2.5 million to the reserve for future capital at year-end.  This had been £216,947 lower than budgeted and was a consequence of the application of a risk-free interest rate on HRA reserve balances reflecting the allocation of risk between the general fund and the HRA.

Officers were making progress against a number of major capital projects on the approved programme as outlined in section 7 of the report.  The Council was expected to spend £56.2 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 £34.8 million by 31 March 2019, against an estimated position of £71.15 million, which was due to slippage on both the approved and provisional capital programme, as detailed in the report.

The Council held £117 million of investments and £224.6 million of external borrowing as at 30 November 2018, which included £193.1 million of HRA loans.  Officers confirmed that the Council had complied with its Prudential indicators in the period, which had been set in February 2018 as part of the Council’s Capital Strategy.

Questions and comments from the Committee raised the following points:

·        Costs in relation to agency staff in refuse and recycling service was due mainly to long-term sickness absence, and in relation to building control was due to difficulties in recruiting building surveyors

·        The Council was currently actively marketing The Billings, and was confident that it would be let within the next few months

·        In relation to additional gate fee costs, the Committee noted that the waste market had changed in the past year with a significant increase in fees to dispose of recyclates. Monies had therefore been set aside in reserve to mitigate the impact and in the budget for future years to mitigate the ongoing impact

·        The Committee noted the additional external legal expenses incurred as a result of work involved with the Local Plan and specialist advice in support of the development of major capital schemes

·        The Council was currently reviewing its investment portfolio as part of the ongoing work on the investment strategy

·        Following a question as to why HRA rental income was £119,460 lower than budgeted, the Director of Finance indicated that a response would be circulated to the Committee after the meeting.

Having considered the report, the Committee

RESOLVED: That the results of the Council’s financial monitoring for the period April to November 2018 be noted.

Reason:

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