Agenda item

Report of the Cabinet Member Finance

The Cabinet Member Finance introduced the report which highlighted the Council’s financial performance for the previous year which set out the General Fund and Housing Revenue Account (HRA) revenue and capital outturn position for 2017/18. The information contained within the report had been used to prepare the Council’s Statement of Accounts for 2017/18.

She explained that 2017/18 had been another challenging year due to continued changes to Government funding arrangements together with the economic climate, which raised ongoing concerns for the council’s budgets.

The Cabinet Member reported that an underspend of £403k had been achieved due to the hard work and sound financial management by officers and partners via savings, reducing costs and generating income where possible. This would be transferred to the budget strategy support reserve pending decisions for its use in 2018/19 and future years.

Significant variances to the original budget included the following :

·         Waste and Recycling-exceptional, one-off  expenditure had been incurred due to the implementation of the new regime which is why a contract variation of an additional £200,000 be considered by council for approval in 2018/19 to reflect the true anticipated cost of the Ubico contract.

·         Shortfall in car parking income of £30k in the first quarter of the year. The implementation of the car parking strategy is expected to result in this shortfall being recovered in the remainder of the year, with the expected outturn being in line with budget.

·         Cemetery and Crematorium-there had been a loss of income due to capacity issues with the current facility but the new build remained on track and within budget.

The Cabinet Member then highlighted the following:

·         There was a proposal to support the Christmas lights with match funding from the Business Improvement District

·         One carry forward request supported by Cabinet and for Council approval was £7k to allow for identity cards and software to be integrated in the new sound system.

·         Treasury management had reported a surplus of over £70k for its net loan and investment interest for the financial year. This was mainly due to diversifying some of our investments into a Pooled Property Fund of  £3m which provided returns over 4%. In light of the strong returns the authority has since added further investment into two other funds (CCLA Diversified & Schroders Maximiser Fund) after seeking advice from our advisers Arlingclose. As interest rates still remained low the returns of these funds would provide extra revenue to support the council’s Medium term financial strategy going forward.

·         The outturn on investment income was £431k or 0.80% return on an average portfolio of £23.5m.

·         The outturn for debt interest paid was £2.434m on an average debt portfolio of £66.4m which equated to 3.67% .

·         The business rates pool had delivered a positive variance of £23,700 which has been transferred to the Business rates retention equalization reserve which would support economic and business growth.

·         She welcomed the work CBH and CBC were undertaking beyond its remit including the investment in benefits advice, employment initiatives and services for older and disabled people.

·         There was a 98% collection rate for business rates and council tax as outlined at appendices 10 and 11.

Finally, the Cabinet Member wished to put on record her thanks to every council employee without whom the delivery of services within budget and the under-spend would not have been achieved.

The following points were raised by Members and responses given:

·         It was noted that only a modest amount was spent on air quality monitoring, should this be increased to match public expectation?  The Cabinet Member undertook to take this issue to the Budget Scrutiny Working Group as part of the budget setting process.

·         The Cabinet was requested to look into the annual grant which CBC had previously paid to Cleeve Common.

·         Section 106 funding for play equipment- the detail for allocating funds for play space provision was detailed in the 5 year play space investment plan

·         It was noted that there was an increased reliance on business rates and the council should ensure that the different data sources of businesses liable for nndr should be used. The Cabinet Member Finance stated that the Revenues and Benefits service was thorough and had high collection rates.

·         Concern was expressed regarding the use of reserves and using windfalls and underspends to support the general fund. The Cabinet Member Finance acknowledged that this was not sustainable but highlighted that whilst there was continued uncertainty with business rates this could not be avoided.

·         Presentation of data in appendix 3-it was noted that in a few cases the current budget was significantly larger than the original and to that end the quality of the data used was questioned. In response the Cabinet Member stated that in the instance quoted this was due to corporate management shifts and in some instances changes could not be predicted so budgets had to be adjusted accordingly.

·         What was the background behind the overspend at The Wilson by £50k and the underspend at Leisure@ by £70k in utility costs. The Cabinet Member Healthy Lifestyles explained that there was ongoing work at Leisure@ and the figures regarding savings on utilities and at the Wilson would be made available.

·         Monitoring of car parking income at Regent Arcade - the Cabinet Member Development and Safety acknowledged the issues at Regent Arcade and said the current car parking system was being replaced

·         Enhanced investment property portfolio-concern was expressed that where investment was not an organisation’s core activity it faired badly. In response the Cabinet Member stressed that diversification of investment was very important and whilst the risks were acknowledged they were deemed to be worth taking in terms of the potential benefits.

RESOLVED (unanimously)THAT

1.    the financial outturn performance position for the General Fund, summarised at Appendix 2, and notes that services have been delivered within the revised budget for 2017/18 resulting in a saving (after carry forward requests) of £403,179.

2.    £7,000 of carry forward requests (requiring member approval) at Appendix 5 be approved.

3.    the use of the budget saving of £403,179 as detailed in Section 3 be approved.

4.    a further allocation of £15k towards Contactless Donation Points, funded via a contribution from the Homelessness earmarked reserve, as detailed in para 8.2 be approved.

5.    a 2018/19 contract fee adjustment of £200,000 to Ubico Ltd, funded from General Balances, as detailed in para 13.5 be approved.

6.    the annual treasury management report at Appendix 7 be noted and the actual 2017/18 prudential and treasury indicators be approved.

7.     the capital programme outturn position as detailed in Appendix 8 be noted and the carry forward of unspent budgets into 2018/19 (section 7) be approved.

8.    the position in respect of Section 106 agreements and partnership funding agreements at Appendix 9 (section 9) be noted.

9.    the outturn position in respect of collection rates for council tax and non-domestic rates for 2017/18 in Appendix 10 (section 10) be approved.

10.  the outturn position in respect of collection rates for sundry debts for 2017/18 in Appendix 11 (section 11) be noted.

11.  the financial outturn performance position for the Housing Revenue Account for 2017/18 in Appendices 12 to 13 be received and the carry forward of unspent budgets into 2018/19 (section 12) be approved.

12.  the budget monitoring position to the end of June 2018 (section 13) be noted.