(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.
Presented By:Leader of the Council
Minutes:
(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.
Supporting documents: