Agenda item

Cabinet Members' Items - Report of the Finance and Corporate Resources Portfolio Holder - A.6 - Financial Performance Report - In-Year Performance against the Budget as at the end of September 2018 and Long-Term Financial Forecast Update

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

Decision:

RESOLVED that

(1) in respect of the financial performance against the budget at the end of

September 2018:

(a) the position be noted;

(b) the proposed in-year adjustments to the budget, as set out in Appendix H to item A.6 of the Report of the Finance and Corporate Resources Portfolio Holder be agreed; and

amount of money that can be placed overnight with the Council’s bankers be increased temporarily from £1.000m to £1.500m for each day the offices are closed over the Christmas break.

(2) in respect of the Updated Long Term Forecast revised at the end of September

2018:

(a) updated forecast be agreed; and

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

Minutes:

The Cabinet gave consideration to a report of the Finance and Corporate Resources Portfolio Holder (A.6) which provided it with an overview of the Council’s financial position against the budget as at the end of September 2018 and also presented it with an updated forecast on an on-going basis as part of developing the budget for 2019/20 and beyond.

The report was presented in two distinct sections as follows:-

1) The Council’s in-year financial position against the budget at the end of September 2018; and

2) An updated long term financial forecast and estimated position for 2019/20.

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

· In respect of the position at the end of September, it was acknowledged that

expenditure or income trends might still be emerging. However any significant issues arising to date had been highlighted and comments provided as necessary.

· The position to the end of September 2018, as set out in more detail in the Executive Summary, showed that, overall, the General Fund Revenue position was behind the profiled budget by £3.468m.As had been the case in previous quarters, the variance to date primarily reflected the timing of expenditure and income although as mentioned above, underlying trends might emerge or be confirmed over the remainder of the year.

· 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 provided 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 updating the long term financial forecast.

· As highlighted in the corresponding report at the end of July 2018, those regular finance reports would 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. Appendix H to the reporttherefore set out a number of changes to in-year budgets with an associated recommendation also included within the report.

· The net impact of all of the budget adjustments would be moved to, or from, the Forecast Risk Fund. The long term forecast relied upon £0.500mof 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.

· A half year treasury management review had been carried out with a summary set out in the report along with an associated recommendation to temporarily increase the aggregate limit of funds that could be placed overnight with the Council’s bankers for the period that the offices would be closed over the Christmas break.

In respect of the updated long term financial forecast:

· The forecast had been reviewed, as at the end of September 2018 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.

· A review of risks associated with the long term approach to the forecast was also the subject of on-going review and was reported within Appendix J to the report.

· As previously mentioned last year, 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 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) Delivering a positive outturn position each year; and

5) The mitigation of cost pressures wherever possible.

The Leader of the Labour Group, Councillor I J Henderson, paid tribute to the ongoing hard work and dedication of the staff in these financially stringent times.

The Leader of the Council, Councillor Stock, paid tribute to the Head of Finance, Revenues and Benefits Services, Richard Barrett and his Officers for their continued efforts in keeping the Council’s budget in a robust condition.

Having considered and discussed the information provided in the report and the appendices attached thereto:-

It was moved by Councillor Stock, seconded by Councillor Skeels Snr. and:-