Agenda item

To provide an overview of the Council’s financial position against the budget as at the end of July 2018 and to present an updated forecast on an on-going basis as part of developing the budget for 2019/20 and beyond.

RESOLVED –

(1)    That in respect of the financial performance against the budget at the end of July 2018, that:

(a)    the position be noted;

(b)    the proposed in-year adjustments to the budget, as set out in Appendix H to item A.3 of the Report of the Finance and Corporate Services Portfolio Holder, be approved;

(c)    future amendments to in-year employee budgets to reflect organisational changes be delegated to the Chief Finance Officer on the basis that they do not increase the Council’s overall net budget; and

(d)    the decision to continue to be a member of the Essex Business Rates Pool and associated bid for pilot status in 2019/20 (if advantageous to the Council) be delegated to the Finance and Corporate Resources Portfolio Holder.

(2)    That in respect of the updated Long Term Forecast, that:

(a)  the updated forecast be approved; and

(b)   the Resources and Service Overview and Scrutiny Committee be consulted on the updated position.

The Cabinet gave consideration to a comprehensive report of the Finance and Corporate Resources Portfolio Holder (A.3) which provided it with an overview of the Council’s financial position against the budget as at the end of July 2018 together with an updated forecast on an on-going basis as part of developing the budget for 2019/20 and beyond.

In respect of the in-year financial position at the end of July 2018:

The Cabinet was informed that, in respect of the position at the end of July 2018, it was relatively early in the financial year and therefore some expenditure or income trends could still be emerging. However, any significant issues arising to date had been highlighted within the report and comments provided as necessary.

It was reported that the position to the end of July 2018 showed that, overall, the General Fund Revenue position was behind the profiled budget by £2.143million. As had been the case in previous years, the variance at the end of the first period of the year primarily reflected the timing of expenditure and income although as previously mentioned, underlying trends were likely to emerge or be confirmed over the next quarter.

Members were made aware that, in respect of other areas of the budget such as the Housing Revenue Account, capital programme, collection performance and treasury activity, apart from additional details set out in the report, there were no major issues that had been identified to date. Any emerging issues would be monitored and updates provided in future reports which would include their consideration as part of updated financial forecast.

The Cabinet was advised that it was proposed to respond to in-year budget pressures and other changes as they emerged rather than wait until the detailed estimates were prepared in December / January of each year as part of the annual revised budget process. This would not only provide a more up-to-date budget monitoring process over the course of the year, but it would also ‘unbolt’ the revised budget process from the work associated with developing the subsequent years forecast which in turn would allow a greater level of focus on those two separate strands of work. However, both strands of work would be brought together when the budget was reported to Council in February each year.

With the above in mind, Appendix H to the report had been added, which set out a number of changes to in-year budgets with an associated recommendation also included within the report. Appendix H also provided for the continuation of the ‘banking’ of savings as they arose, which would be contributed to the Forecast Risk Fund as required to support the long term forecast. The long term forecast relied upon £0.500million of in-year outturn savings being set aside over the course of the whole year within the Forecast Risk Fund in order to support the long term plan.

The Cabinet was informed that it was proposed to delegate changes to in-year employee budgets to the Chief Finance Officer in order to ensure the budget reflected the most up-to-date position as internal reorganisations were agreed by the Chief Executive. It was proposed to delegate to the Finance and Corporate Resources Portfolio Holder the decision on whether to continue as a member of the Essex Business Rates Pool along with supporting a bid for Business Rates Pilot status, if it was advantageous for the Council.

In respect of the updated long term financial forecast:

It was reported that the forecast had been reviewed and updated from 2019/20 onwards. The required changes did not expose the Council to any additional risk and although the annual deficit or surplus position for each year of the forecast had been amended, they could still be accommodated within the overall projected financial position supported by an increased Forecast Risk Fund.

Members were advised that a review of risks associated with the long term approach to the forecast had also been undertaken with the outcomes separately reported within Appendix J to the report.

Cabinet recognised that it was important to continue to deliver against the new longer term approach to the budget as it continued to provide a credible alternative to the more traditional short term approach which would require significant savings to be identified over 2019/20 and 2020/21. Work therefore remained on-going across the 5 key work strands of:

1)  Increases to underlying income;

2)  Controlling expenditure / inflationary increases;

3)  The identification of savings / efficiencies;

4)  Delivery of a positive outturn position each year; and

5)  The mitigation of cost pressures wherever possible.

Having considered and discussed the contents of the Portfolio Holder’s comprehensive report and appendices:-

It was moved by Councillor G V Guglielmi, seconded by Councillor P B Honeywood and:-

RESOLVED –

(1)   That in respect of the financial performance against the budget at the end of July 2018, that:

(a)    the position be noted;

(b)    the proposed in-year adjustments to the budget, as set out in Appendix H to item A.3 of the Report of the Finance and Corporate Services Portfolio Holder, be approved;

(c)    future amendments to in-year employee budgets to reflect organisational changes be delegated to the Chief Finance Officer on the basis that they do not increase the Council’s overall net budget; and

(d)    the decision to continue to be a member of the Essex Business Rates Pool and associated bid for pilot status in 2019/20 (if advantageous to the Council) be delegated to the Finance and Corporate Resources Portfolio Holder.

(2)   That in respect of the updated Long Term Forecast, that:

(a)  the updated forecast be approved; and

(b)   the Resources and Service Overview and Scrutiny Committee be consulted on the updated position.