To consider the Head of Financial Services’ Report No. FIN1610 (copy attached), which sets out the provisional outturn position on the General Fund (revenue and capital) for 2015/16, subject to audit.
Presented By:Leader of the Council / Corporate Services
Minutes:
The Cabinet considered the
Head of Financial Services’ Report No. FIN1610, which set out the provisional
outturn position on the General Fund (revenue and capital) for 2015/16, subject
to audit. The Report set out the General Fund Revenue Summary and Revenue
Balances, with the principal individual variations between the current approved
estimates and actual expenditure.
The Cabinet was advised
that, in its original budget for 2015/16, the Council had set a savings figure
of £500,000 to be achieved through reductions in service costs and additional
income generation, in addition to £315,000 of expected staff turnover savings.
A significant proportion of these savings had been achieved during the first
half of 2015/16 and the efficiencies identified had been built into the
Council’s revised budget, as set out in Appendix A to the Report. The revised
budget figure had been further adjusted to reflect any subsequent virements, supplementary estimates and use of the service
improvement fund, to form the current approved budget, with estimated year-end
balances of £1.47 million.
The provisional outturn
showed an improvement in the Council’s financial position, with a net
underspend of approximately £473,000 against the current approved budget and a
net underspend of £337,000 compared with the last budget monitoring position,
before accounting for any change due to
the operation of the business rates retention scheme. A list of the principal variations between
the provisional outturn position and the current approved budget was set out in
Appendix B to the Report. The effect of the net underspend was to increase the
General Fund revenue balance to approximately £1.94 million, which was close to
the top of the range of balances set out in the Medium Term Financial Strategy
(£1 million - £2 million).
The Report set out how the
operation of the Business Rates Retention Scheme could cause large swings in
the General Fund balance at the end of the financial year. Financial
transactions in this respect would increase the General Fund balance from £1.94
million to £2.47 million, which would be above the approved range of balances.
It was, therefore, proposed that a transfer of £473,000 should be made to the
Stability and Resilience Reserve. The Report also gave details of financial
risks to the Council which had been identified to date. These included the outcomes of the review of
the Business Rates Retention Scheme, the uncertain future of the New Homes
Bonus and the implications of legislation around welfare reform. As part of the
outturn process, and, in line with proper accounting practices, all outstanding
potential liabilities would be reviewed to ensure that the appropriate level of
reserves was being held against the risks that the Council faced.
Appendix C of the Report
set out the Capital Outturn Summary and showed a total net underspend of
£5,919,000 against the current approved budget. This underspend was due mainly to the re-scheduling
of work on a number of projects with a consequent slippage of expenditure of
£5,893,000 into 2016/17. After
accounting for this slippage, the Capital Programme had underspent by around
£26,000. The most significant variations in expenditure were listed in Appendix
D to the Report.
The Cabinet discussed many
aspects of the Report, including the effect of business rate appeals, the
purpose of and contributions to the Stability and Resilience Reserve and how
income generation could be maximised to help to close any budgetary gap
The Cabinet RESOLVED that
(i)
the
General Fund provisional outturn for 2015/16 for both revenue and capital be
noted; and
(ii)
the
approach to reserves and balances, as set out in the Head of Financial Services’
Report No. FIN1610, be approved.
Supporting documents: