Agenda item

(1)       Medium Term Financial Strategy 2015/16 – 2018/19 –

 

To consider the Head of Financial Services’ Report No. FIN1518 (copy to follow), which sets out the principal elements of the Medium Term Financial Strategy.

 

(2)       Revenue Budget Monitoring and Forecasting 2015/16 - Position at        October, 2015 –

 

To consider the Head of Financial Services’ Report No. FIN1520 (copy attached), which sets out the Council’s anticipated financial position for 2015/16 based on the monitoring exercise carried out in October, 2015.

 

(3)       Capital Programme Monitoring 2015/16 - Position at October,  2015 –

 

To consider the Head of Financial Services’ Report No. FIN1519 (copy attached), which sets out the Council’s position regarding the Capital Programme for 2015/16 based on the monitoring exercise carried out during October, 2015.

(1)          Medium Term Financial Strategy 2015/16 – 2018/19 –

 

The Cabinet considered the Head of Financial Services’ Report No. FIN1518, which set out a review of the Medium Term Financial Strategy and sought endorsement of an updated Strategy. It was appropriate to carry out the review at this time as the Council was about to move into its next budget setting cycle.

 

The Cabinet was advised that the review of the Strategy had been carried out in light of the expected continuation of the challenging financial circumstances that the Council had experienced for a number of years. Members were informed that the existing Strategy had served the Council well in supporting financial planning over the medium term. It had been integral to the Corporate Plan and had supported the 8-Point Plan for the achievement of sustainability.

 

The Report set out the keys risks and considerations for future budget setting under the following headings:

 

·         Central Government funding

·         Council Tax

·         Austerity

·         Interest rates

·         Level of reserves

·         Devolution

·         Other key risks

·         Sustainability

 

The Cabinet was informed that, to ensure that a revised Strategy would be relevant to current decision making, it was necessary to consider this in the context of the Medium Term Financial Forecast. The Revenue Forecast indicated the anticipated funding gap for each of the years in the medium term. Based on a set of assumptions about cost pressures and funding levels, and set these against cost reductions and income generation proposed in the 8-Point Plan. Some sensitivity analysis was provided against key assumptions, depicting their effect on the funding gap and on reserves. The Capital Forecast included the draft annual capital programme alongside estimates of spending on invest to save schemes to support the 8-Point Plan and strategic capital plans, such as spending on regeneration. The Council would need to consider moving to borrowing as its internal capital resources were utilised.

 

Following the review, some changes were suggested to the financial strategy to address current priorities and risks, such as the provision for increasing the levels of reserves held, in line with recommendations made by the Council’s auditors and changes to the use of revenue contributions to capital outlay. Members were assured that the Strategy would put the Council in a good position from which to face the significant financial challenges anticipated over the medium term.

 

During discussion, Members expressed their satisfaction with the Council’s financial position and approach set out in the revised Medium Term Financial Strategy. 

 

The Cabinet RESOLVED that:

 

(i)           the principal issues identified in the Head of Financial                       Services’             Report No. FIN1518 and in the summary of        risks in Appendix B             of the Report be noted; and

 

(ii)          the Council be recommended to approve the Financial           Strategy, as set out in Appendix A of the Report.

 

(2)       Revenue Budget Monitoring and Forecasting 2015/16 – Position at October, 2015 –

 

The Cabinet considered the Head of Financial Services’ Report No. FIN1520, which set out the anticipated financial position for 2015/16, based on the monitoring exercise carried out during October 2015. The Report explained that, in the second quarter monitoring exercise, service managers had identified a net overspend of approximately £28,000 against their non-salary budgets. This figure was likely to be more than offset by a number of favourable variances that had been identified, including additional savings in relation to staff turnover and additional interest receipts. Members were reminded that, in light of the variances involved in the Business Rates Retention Scheme, the sum of £1.8 million had been transferred to the Stability and Resilience Reserve, to replenish the amount utilised in the previous year.

 

The Report identified a number of financial risks facing the Council which included not achieving the required savings target, projects not delivering efficiency savings and the deterioration of income streams due to the economic climate.  While some of the savings required for 2015/16 had been identified, Members were informed that the net cost of the Council’s services would need to be reduced to achieve financial sustainability and, therefore, further work would be carried out under the 8-Point Plan in this respect.

 

Members considered the Report and were content with the present position and proposed actions. 

 

The Cabinet RESOLVED that the Head of Financial Services’ Report No. FIN1520 be noted.

 

(3)          Capital Programme Monitoring 2015/16 – Position at October,  2015 –

The Cabinet received the Head of Financial Services’ Report No. FIN1521, which provided the latest forecast regarding the Council’s Capital Programme for 2015/16.  The Report advised that the Programme, including slippages and variations, totalled just over £13.5 million. The recent monitoring exercise had identified a number of areas of slippage, including infrastructure works between Wellesley and Aldershot town centre as part of the Activation Aldershot initiative, the replacement of car park pay and display machines and the refurbishment of the playgrounds at Manor Park and the Municipal Gardens. It was noted that the main underspend in the Programme was due to the in-house management of Aldershot town centre improvements. A capital bid would be put together for the 2016/17 Programme to progress phase six of the scheme, relating to works around Aldershot Station.

 

The Cabinet RESOLVED that the Head of Financial Services’ Report No FIN1521, be noted.