Issue - meetings

To consider the Provisional Revenue and Capital Outturn for the 2017/18 financial year.  

RESOLVED that:

(i)            The provisional revenue and capital outturn position for 2017/18 be noted;

(ii)          The use of reserves proposed in paragraphs 10 and 11 of the report be endorsed and the Head of Finance be authorised to make the necessary arrangements;

(iii)         The Head of Finance be authorised to set up a new reserve entitled Government Funding Reduction Reserve; and 

(iv)         The Annual Treasury Management Report (Annex 1 of the report to the Executive) be noted.

Councillor T. Schofield, Executive Member for Finance, introduced the report and advised the Executive of the provisional revenue and capital expenditure for 2017/18. The Executive was asked to note the 2017/18 provisional outturn for revenue (£849,600 underspend) and capital (£2.56 million underspend).

It was recognised, due to its nature, that the capital programme was not easy to profile accurately and had historically underspent by around 20% to 40% per year, with the exception of 2016/17 which had a relatively small underspend. Councillor Schofield explained the capital programme had progressed well in 2017/18, with a variance of 11%. It was noted that any unspent budget would remain in capital reserves.

Councillor Schofield informed the Executive that during 2017/18 the Council had been able to manage the revenue pressure on the budget, returning a 5% underspend. This was due to a number of factors including, beneficial recycling prices, increased membership of the Garden Waste scheme and the increased supply of temporary accommodation and preventative activity for those at risk of homelessness, leading to reduced B&B accommodation costs.    

Councillor Schofield explained that the proposed use of the revenue underspend, to set up a reserve against the risk of future reductions in income retained from business rates, was set out in paragraph 11 of the report.

The Executive noted an update to the figures, on page 48, Annex 3, Table 7 of the agenda, concerning the Pathway for Care Ltd loan which had been listed with a rate of return of 9%. Councillor Schofield explained that following a change in structure to Pathway for Care, which had been previously reported to the Executive, this rate of return was zero percent in 2017/18 and all records had been updated accordingly.   

The Overview and Scrutiny Committee considered the report on 12 June 2018.  The Executive Member for Finance thanked the Committee for its questions and comments and noted that these had been captured in the minutes of the meeting.

Councillor Schofield concluded by stating that despite the challenges, at a time when many local authorities were making cuts and selling off assets, that the Council would continue to be ambitious and would continue to deliver excellent services to residents.   

RESOLVED that:

(i)            The provisional revenue and capital outturn position for 2017/18 be noted;

(ii)          The use of reserves proposed in paragraphs 10 and 11 of the report be endorsed and the Head of Finance be authorised to make the necessary arrangements;

(iii)         The Head of Finance be authorised to set up a new reserve entitled Government Funding Reduction Reserve; and 

(iv)         The Annual Treasury Management Report (Annex 1 of the report to the Executive) be noted.

Reason for decision: To advise Members of the revenue and capital expenditure for 2017/18, to seek authorisation for the proposed changes to reserves and to comply with the Council’s reporting requirements in relation to Treasury Management activity.

Alternative options: To amend, or reject, the proposals to adjust reserves as set out in the report.

To consider the Provisional Revenue & Capital Outturn for the 2017-18 financial year, to be reported to the Executive on 21 June 2018.

To consider any Advance Questions submitted.

The Committee considered the provisional revenue and capital outturn for the 2017-18 financial year.

The Committee discussed the report, and there were a number of questions and comments, relating to the following topics:

·         Capital Projects Spending. Members were advised that capital project spending was primarily monitored over the life the project, and that any requests for significant additional funding would be submitted to the Executive for consideration. It was identified that most reported underspends and overspends during the life of a project therefore resulted from differences in in year project timings, rather than changes to total costs. It was noted that the remaining work to be completed on the Warwick Quadrant project would be confirmed following the meeting.

·         Allocation of Reserves. Members were advised that reserves were created to reflect identified demands. The proposed Government Funding Reduction reserve was confirmed to reflect the external risk associated with uncertainty of NNDR (Nation Non-Domestic Rates – colloquially Business Rates) levels from 2020. It was confirmed that the Business Rates Pilot scheme was for one year, and was not currently projected to extend beyond that point.

·         Treasury Performance. It was identified that the Council did not have the capacity to undertake the investment fund management currently conducted by an external fund manager (Tradition) in-house. It was noted that information on when the external fund manager was last reviewed would be confirmed following the meeting. It was noted that the Council had been able to obtain a positive short term investment variance in 2017/18 resulting from additional actions to secure a return on cash balances.  It was noted that information on income from trading companies would be confirmed following the meeting.

·         Parking. A query was raised regarding the reduced income from parking services. Members were advised that the situation was being monitored to determine the causes. It was confirmed that pilot work was being undertaken on a pay-on-exit scheme at the Bancroft Road site, with consideration being required to ensure there was not an adverse effect on traffic. It was noted that the timescale for future implementation of related schemes would be confirmed.

·         Legal Services. Members were advised that the contextual changes to legal services costs had been reflected in the 2018-19 budget, and that the overspend was not expected to repeat to the same degree. It was noted that the overspend had been impacted by the reduction in land charges income, following changes in legislation to allow competing providers. Recruiting for a number of legal team positions was noted to be ongoing. Members were advised that legal activities were undertaken in-house where appropriate, but that external legal advice continued to be required in specialist fields. The Leader advised that the Council would be working to ensure that it had sufficient resourcing, including in legal services, to deliver its objectives.

·         Fund Recovery from Icelandic Banks. It was confirmed that all money in Icelandic banks affected by the 2008 financial crisis had now been recovered.

·         Recycling Income. Members  ...  view the full minutes text for item 9