Agenda item

Report of the Strategic Director of Housing and Customer Services

Presented by the Corporate Portfolio Holder

The Corporate Portfolio Holder presented the report to Members.

He advised that the report summarised the main elements of the financial performance for 2018/19 and sought approval of the impact on reserves. He noted that the results were ‘provisional’ as they were still subject to external audit and could change. He highlighted that the final audited accounts would be presented to the Audit & Governance Committee on 24 July 2019 for approval.

He informed members that the financial performance across the council had continued to improve and he thanked the Finance team for their hard work in delivering the annual accounts. He advised that the team had been dealing with some legacy issues and despite that, they had delivered a quality outcome against a tight deadline.

In relation to the General Fund he highlighted the following:-

• The expected final position on the General Fund was £1.525m surplus against a budget of £299k.

• The majority of variances had been known about and reported throughout the year. 

• All major variances were included in Table 2 of the report. 

• The most significant variance had been a favourable movement in business rates, with an additional £480k retained by the council compared to the budgeted level.  Differences between budget and actual business rate income were not unusual due to the complex nature of forecasting business rates.

• It is proposed that £1.42m of the surplus was contributed to the self-sufficiency reserve.

• Of the remaining £100k surplus it was proposed to allocate:

In relation to the HRA he noted the following:-

• The outturn on the HRA was an expected surplus of £4.9m against a budget of £2.95m with the major variances being a lower than budgeted depreciation charge for the year, under spends on employee costs and on painting programmes. 

• The In House Repairs team also generated a surplus of £385k that was recycled back into the HRA.  In 2017/18, the amount was £272k and the increase for the past year demonstrates the effectiveness of bringing more repairs work and capital improvements back in house and the position should continue to improve in the current year.

He thanked the repairs team for the continuing good work.

In relation to Capital and Reserves he highlighted the following:-

• In total, the Council spent just under £12m on assets.  The General Fund underspent by £400k and the HRA carried forward the majority of its £4.2m under-spend into future years for completion.

• The council’s reserves remained healthy with agreed minimum levels maintained on both the General Fund and the HRA.

• The General Fund Self–Sufficiency reserve was now £4.19m and well ahead of forecasts. That meant that there was now a healthy reserve available to manage the future deficit years predicted to arise from 2021 on the General Fund medium term financial plan that totalled £5.2m to 2024.

• The HRA Loan Redemption reserve had now the full £13m of funds in place to repay maturity loans due for redemption in 2022, well ahead of the anticipated 2020 target date. Again, it was a credit to the team.

• There were £7.28m of earmarked reserves across all revenue accounts set aside for various projects.  The amount included £0.9 unallocated reserves and it was proposed that:

Councillor R D Bayliss was pleased with the surplus from the HRA and therefore the Council was on track to repay the loan ahead of schedule. He added his thanks to the Finance team as they had not let the Council down and felt that there were ample options before them for the future.

Councillor A Woodman welcomed the allocated funds towards the commissioning of a Carbon footprint report and the £30k to undertake a food waste pilot that would help in reducing what went to landfill.

Councillor R Ashman welcomed the earmarked reserve towards the shopfronts and he was pleased that the surplus was not just being made but there were good proposals to use the funds.

Councillor R Blunt felt that the Council was in a very sound position, hitting its targets and developing new schemes to bring forward.

It was moved by N J Rushton, seconded by Councillor R Blunt and

RESOLVED THAT:

The Financial Performance for 2018/19, including the impact in reserves and balances as at 31 March 2019 be approved.

Reason for decision:- Requirement of Financial Procedure Rule