Agenda item

The Committee considered a report that set out the financial monitoring position for period April 2018 to January 2019.

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 £2,516,169. 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 £840,958 lower than the latest estimate once adjusted for items either funded from reserve or transferred to reserve. It was currently assumed, subject to consultation with the Lead Councillor for Finance and Asset Development, that the underspend would be transferred to the Invest to Save and Budget Pressures reserve to pump prime the Future Guildford Transformation project.

A surplus on the Housing Revenue Account would enable a projected transfer of £6.8 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 £50.13 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 £31.48 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 £118.9 million of investments and £212.5 million of external borrowing as at 31 January 2019, 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.

In relation to the slippage in the capital programme, the Committee noted that, for a number of reasons, providing an accurate estimate of the revenue implications of delays in bringing forward major capital projects would be difficult.

Having considered the report, the Committee

RESOLVED: That the results of the Council’s financial monitoring for the period April 2018 to January 2019 be noted.

Reason:

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