Agenda item

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

The report set out the projected outturn position on the Council’s general fund revenue account, based on actual and accrued data for the period April to July 2019.  Officers were projecting an underspend of £685,082 which included a £513,802 underspend on all services and a £171,280 reduction in dept repayment as a result of last year’s slippage on the capital programme. 

In relation to the Housing Revenue Account, a slightly higher projection was anticipated of £18,000 due to an increase in repairs, maintenance and staffing costs. 

A projected spend of £82.5 million was anticipated to be spent on the Council’s capital schemes by the end of the financial year.  The expenditure was higher than it had been for many years due to delivering the Council’s capital programme in the form of the rebuild of the Guildford Crematorium and the Slyfield internal road. 

The Council held £99.2 million of investments and £231.9 million of external borrowing at 31 July 2019, which included £192.9 million of HRA loans.  The Committee noted that the Council had complied with its Prudential Indicators in the period, which were set in February 2019 as part of the Council’s Capital Strategy. 

Comments from the Committee raised the following points:

·         Noted that people were not using off-street parking owing to uncertain economic times caused by Brexit. 

·         Noted that the Future Guildford project had secured £400,000 of additional funds for the Council.

·         In relation to the variance in investor saving, it was noted that the Council had to pump prime to deliver savings down the line.  The purpose of the reserve was to deliver savings.  Had £814,000 available throughout the year but had only used £163,000, so a good saving had been achieved overall.

·         Considered the definition of an in-house investment and noted that at the end of the last financial year £5 million pounds worth of funds had been disposed of which was transferred around different accounts so to make best use of it. 

·         Queried why from 2020 no S106 funding had been factored in and whether that needed to be revisited?  It was confirmed that it was difficult to provide a projection of funding achieved by S106 contributions as no standard charge was applied across the borough.  Instead, S106 monies were dependent upon negotiations with developers and what could be achieved on specific sites.

·         Concerned that the Council had borrowed a lot of money and was not clear from the report which big projects had been paid for?  The Committee was referred to the liability benchmark graph, based upon what was in the capital programme at the time, an assumption of £10 million pounds worth of capital projects was made.  Borrowing on the general fund had only been undertaken in the last few years.  G-Live for example had been paid for out of capital reserves and receipts.  The main source of debt was in relation to the Housing Revenue accounts and the Council took a strategic decision to service the debt only.  SARP was building an asset and therefore the debt would eventually be turned into an equity.

·         Queried whether the cost of filling vacant posts with contract labour would cost the Council a premium. It was confirmed that the Future Guildford programme had created a unique position in that some posts had been removed entirely and therefore monies had been saved.  Agency staff would be used in the interim until the long-term structure of the Council was confirmed. 

Having considered the report, the Committee

RESOLVED:

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

Reason:

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