Agenda item

To consider the Head of Financial Services’ Report No. FIN1511 (copy attached), which sets out the provisional outturn position on the General Fund (revenue and capital) for 2014/15, subject to audit.

The Cabinet considered the Head of Financial Services’ Report No. FIN1511, which set out the provisional outturn position on the General Fund (revenue and capital) for 2014/15, 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 2014/15, the Council had set a savings figure of £500,000 to be achieved through reductions in service costs and income generation, in addition to £300,000of expected staff turnover savings. A significant proportion of these savings had been achieved during the first half of 2014/15and the efficiencies identified had been built into the Council’s revised budget, which was 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 £1.58 million.

The provisional outturn showed an improvement in the Council’s financial position, with a net underspend of approximately £308,000 against the current approved budget and £112,000 compared with the last budget monitoring position. 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 revenue balances to approximately £1.89million, which fell within the range of balances set out in the Medium Term Financial Strategy (£1 million -£2 million). 

It was noted that, included in the variations identified, were a number of under spent budget items where specific conditions had prevented the expenditure being made during 2014/15 but where the works was still required and would be carried out during 2015/16. In accordance with Financial Regulations, the Directors’ Management Board had recommended approval for these items, totalling approximately £322,000,to be carried forward for spending in 2015/16.The Cabinet was advised that £172,000 of the carry forward items related to expenditure that was directly funded by external grants.  The grants would be set aside to meet this future expenditure.   This left around £150,000,which would be set aside from General Fund balances in 2014/15in order to meet the expenditure now planned for 2015/16.

The Report set out details of financial risks to the Council which had been identified to date.  It was hoped that the announcement of a second 2015 Budget, to be held on 8th July, 2015, would provide more clarity over future funding for local government, as would the outcome of the review of Business Rates. 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 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 £3,410,000 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 £3,342,000 into 2015/16.  After accounting for this slippage, the Capital Programme had underspent by around £68,000. The most significant variations in expenditure were listed in Appendix D to the Report.

The Cabinet NOTED the General Fund provisional outturn for 2014/15and the level of reserves and balances; and

RESOLVED that the approach to reserves, as set out in the Head of Financial Services’ Report No. FIN1511, be approved.