Agenda item

Report of the Cabinet Member Finance

The Cabinet Member Finance introduced the report, the purpose of which was to notify Members of any known significant variations to budgets for 2018/19 and highlight any key issues.

She explained that the table at 2.1 summarised the net revenue impact position of the variances identified at this stage in the financial year, of anything over 50K and areas with volatile income trends. In brief they showed an increase in income of off street car parking, recycling credits, green waste subscription, property investment income, together with additional section 31 grant, and shortfalls of targets as reported in September 2018.

The Cabinet Member Finance explained that a detailed exercise was carried out to ensure that capital schemes were being delivered as planned within allocated capital budgets, some of which were timetabled to straddle two or more financial years. She reported the following variances to capital budgets :

·         The capital scheme for the provision of a new sports & play hub, including a new splashpad and changing rooms at Leisure@ had been completed within the build timescales.  There was an underspend of £26k against the total scheme budget of £2.5 million which reduced the funding requirement for the scheme.

·         There was an expected net surplus for the year of £222k, generated from new rental income streams of £960k arising from the purchase of 4 commercial properties during the year, net of one off costs of £120k and short term and long borrowing costs of £618k.

·         Housing Revenue Account (HRA) -the operating surplus was currently forecast at £2,273.000 against a budget of £2,180,000 an increase of £93K.

·         HRA capital of the existing stock showed the current forecast for capital expenditure on existing stock at £7,373,000, a reduction of £689,000 in comparison to budget (£8,062,000). Within that figure there had been the following significant project variations:-

·         External Works (£329,000 reduction from budget of £543,000).

·         Windows & Doors (£118,000 reduction from budget of £2,425,000)

·         Door Entry Systems (£95,000 reduction from budget of £130,000)

·         The HRA capital on new builds or acquisitions - good progress on development sites in both 2017/18 and the current year had reduced the pressure to identify potential acquisitions this year. It was proposed that any unspent budget would be rolled forward as required into 2019/20.

The monitoring report for the collection of council tax and business rates income at end of December 2018 and the projected outturn for 2018/19 was shown at Appendix 2.

The Cabinet Member explained that the aged debt report showed the total debt at 31st December, being £1.6m, which had reduced from the position of £1.8m at the end of November.  The Accounts Receivable Team worked hard to recover outstanding debts and it was pleasing to note that there was only £9,000 of aged debt over 1 year for the general fund and £148,000 for the HRA, mainly for tenants rechargeable works.  The level of aged debt was reviewed at the end of each year as part of the statement of accounts to ensure an adequate level of provision was available to fund any irrecoverable debt.

She reported that the impact on the general fund of the variances reported above was that there was a forecast net underspend against the budget of £43,100 for 2018/19. This would be transferred to the Budget Strategy (Support) Reserve, under the delegated authority of the Chief Finance Officer.

Finally the Cabinet Member explained that it would be for Cabinet and Council to decide in July 2019, when outturn was finalised, how to apply any potential savings, although highlighted that the strategy recommended was that this should go to the budget strategy reserve.

The Leader commended the surplus on the overall budget.

RESOLVED THAT

the contents of this report including the key projected variances to the 2018/19 budget and the expected delivery of services within budget be noted/

Council be recommended to approve the budget virements to the 2018/19 budget, as part of the revised budget 2018/19, as detailed in Appendix 4.