Agenda item

To provide an overview of the Council’s financial position against the budget as at the end of June 2019 and to present an updated long term forecast.

RESOLVED that –

(1)       in respect of the financial performance against the budget at the end of June 2019:

(a)       the position be noted; and

(b)       the proposed in-year adjustments to the budget, as set out in Appendix H to the report, be approved, with the additional requirement that the fund of £1.134million set aside for investment in the Council’s property assets be spent in such a way as to reduce future cost pressures and to contribute to the Council’s commitment to carbon reduction.

(2)       in respect of the Updated Long Term Forecast, the updated forecast be agreed and that the Resources and Services Overview and Scrutiny Committee be consulted on the latest position.

The Cabinet gave consideration to a detailed report of the Corporate Finance and Governance Portfolio Holder (A.6) which provide it with an overview of the Council’s financial position against the budget as at the end of June 2019 and which also presented an updated long term forecast.

Therefore the report was split over two distinct sections as follows:

1)     the Council’s in-year financial position against the budget at the end of June 2019; and

2)     an updated long term financial forecast

In respect of the in-year financial position at the end of June 2019:

It was reported that the position to the end of June 2019, as set out in more detail within the appendices, showed that, overall, the General Fund Revenue Account was overspent against the profiled budget by £0.460m. However, it was relatively early in the financial year and therefore some expenditure or income trends could still be emerging and to date the variance primarily reflected the timing of expenditure and income.

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.

Cabinet was made aware that some necessary changes to the 2019/20 budget had been identified which were set out in Appendix H, 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 was based on the identification of £0.500m of in-year outturn savings, which would be set aside over the course of the whole year within the Forecast Risk Fund to support the long term plan.

In respect of the updated long term financial forecast:

Cabinet was informed that the forecast had been reviewed and updated from 2020/21 onwards. An increase in unavoidable / on-going cost pressures was expected in 2020/21, which had had a knock on impact on the level of annual on-going savings required. Based on the initial forecast, the savings target had increased from £0.300m per year to £0.450m per year.

Overall it was felt that the revised forecast could still provide an effective method of managing financial 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 long term financial position, supported by the Forecast Risk Fund that has been set up to underwrite such risks.

It was reported that a detailed review of risks associated with the long term forecast was subject to on-going review and was separately reported within Appendix J to the report.

It was considered important to continue to deliver against the new longer term forecast as it continued to provide a credible alternative to the more traditional short term approach, which would require significant additional savings to be identified in 2020/21.

In terms of delivering against the forecast for 2020/21 and beyond, work remained on-going across the five key work strands of:

1)  Increases to underlying income;

2)  Limiting expenditure / inflationary increases where possible;

3)  The identification of savings / efficiencies;

4)  Delivering a positive outturn position each year; and

5)  The mitigation of cost pressures wherever possible.

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

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

RESOLVED that –

(1)       in respect of the financial performance against the budget at the end of June 2019:

(a)       the position be noted; and

(b)       the proposed in-year adjustments to the budget, as set out in Appendix H to the report, be approved, with the additional requirement that the fund of £1.134million set aside for investment in the Council’s property assets be spent in such a way as to reduce future cost pressures and to contribute to the Council’s commitment to carbon reduction.

in respect of the Updated Long Term Forecast, the updated forecast be agreed and that the Resources and Services Overview and Scrutiny Committee be consulted on the latest position.