Agenda item

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.

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.