Agenda item

The Committee considered a report that set out the financial monitoring position for period April to May 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 an increase in net expenditure on the general fund revenue account of £66,594, which included a £171,280 reduction in the statutory Minimum Revenue Provision (MRP) charge to the General Fund to make provision for the repayment of past capital debt reflecting a re-profiling of capital schemes. At service level, the projected outturn was £237,874 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 £8.53 million to the new build reserve and £2.5 million to the reserve for future capital at year-end.  This had been £97,384 higher than budgeted and reflected modest variations in repair and maintenance expenditure and staffing costs.

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 £82.5 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 £46.42 million by 31 March 2020, against an estimated position of £53.35 million, which was due to slippage on both the approved and provisional capital programme, as detailed in the report.

The Council held £106.5 million of investments and £205.9 million of external borrowing as at 31 May 2019, which included £192.9 million of HRA loans.  Officers confirmed that the Council had complied with its Prudential indicators in the period, which had been set in February 2019 as part of the Council’s Capital Strategy.

Comments from the Committee raised the following points:

·        Where there is slippage in the capital programme, investment interest income rises

·        The Invest to Save variance of £323,000 in the table highlighting major movement in use of earmarked reserves related to slippage in the ICT transformation programme and was therefore an increase in use of reserves.

·        It was acknowledged that further work was necessary to improve project management and governance around projects, as reported in the Council’s Annual Governance Statement. As part of the Future Guildford transformation programme, the management team would be establishing a project management office, which would set the governance arrangements for major projects

·        Slippage in capital projects was occasionally due to circumstances beyond the Council’s control

Having considered the report, the Committee

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

Reason:

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