Cabinet Member for Finance
Decision:
MCa/18/37 – GENERAL FUND FINANCIAL MONITORING 2018/19 – APRIL TO AUGUST 2018
It was RESOLVED:-
1.1 That subject to any further budget variations that arise during the rest of the financial year, the following net transfers of £1,648k be noted:
a) Transfer from reserves of £5k being the net amount for the following specific earmarked reserves, referred to in section 5.8 and Appendix D of this report: · £111k to Carry Forwards (Strategic Planning) · £32k to Waste · £10k to Elections · £122k from Planning for appeal costs · £36k from Homelessness
b) The remaining balance of the General Fund surplus of £773k be transferred to Growth and Efficiency Fund and £880k to the Business Rates Equalisation reserve.
|
Any Declarations of Interest declared: None
Any Dispensation Granted: None
Minutes:
· There was overall, a net favourable variance of £1,648k which was an improvement of £1,472k since the first report. The improved favourable position could be attributed to CIFCO (223K), Gateway14 (262k) and Business Rates (880K)
· Favourable improvements in Development Management (£172K) and Strategic Planning (87K)
· Unfavourable variances included Housing Solutions (Homelessness) £33k and PV panels (13K).
74.2 Councillor Whitehead went on to say that the Growth and Efficiency Fund detailed on page 28 of the report included the commitments in 2018/19 which would result in a remaining balance of £2.2m by March 2019.
74.3 The General Fund Capital Fund had been updated to include carried forward amounts from 2017-18 and included the £16.5m for Gateway14.
74.3 Councillor Whitehead then MOVED the recommendations in the report which Councillor Flatman SECONDED.
74.4 Councillor Otton asked the Cabinet Member for Finance if there was a reason why the Council had switched to long term borrowing and if it was right that the Council used the New Homes Bonus to support the budget?
74.5 In response the Cabinet Member for Finance stated that in terms of borrowing both the Gateway 14 and CIFCO, by using very low interest short term borrowing the Council had made some savings which had been banked. However, going forward when investing in long term assets it made sense to have borrowings, timings and long-term investments more balanced out. At the moment it was easy to borrow money cheaply, however with future uncertainties including Brexit, the Council did not want to find itself in a position where either credit was unavailable or was available at a high price. So it made sense to bank the savings now and try to balance the original short term borrowing that had been undertaken, by balancing it out with long term borrowing in-line with the investments that were long term investments. The borrowing would level out over time because of the timings and nature of the investments. In terms of the use of the New Homes Bonus to support the budget, each year the Council looks at how it could balance the budget without using the New Homes Bonus (NHB), in the last few years the Council has had to make modest use of the NHB to balance the budget. However, if the Council finds that it has a healthy positive variance then that bonus is banked and put into the Growth and Efficiency fund to use on worthwhile projects.
74.6 Councillor Otton also raised concerns relating to the CCLA and the 47k adverse variance in the Health and Safety budget and asked if there was an update on the Regent Theatre. She also queried whether the business rate retention figure was correct and why there was no mention of the contingency fund in the report?
74.7 In response the Corporate Manager for Finance stated that the CCLA was a long-term investment, however the Council’s investment advisors would also be reviewing the investment in the very near future. The Corporate Manager for Finance also confirmed that the overspend on the Health and Safety budget was due to a “one off” purchase of the “Sky Guard” software to ensure safety of staff when lone working.
74.8 The Section 151 Officer added that whilst the business rates calculation was complex to forecast, the figures had been checked with other colleagues across Suffolk and she was now more confident that this was the windfall figure from the business rates pilot scheme.
74.9 With regard to the general reserve fund the Section 151 Officer informed Councillor Otton that the details of the reserve fund could be found in appendix D of the report.
74.10 Councillor Brewster added that members of the Stowmarket Town Council had been working with MSDC’s Procurement Team to appoint a development team for the Regent Theatre, there was one more appointment to be made and he was expecting a planning application to be coming forward in the new year.
74.11 Councillor Barker asked the Section 151 Officer how much income the PV panels were generating each year?
74.12 In response the Section 151 Officer stated that she would need to confirm the exact figure and come back to Councillor Barker with them.
74.13 Councillor Morley raised concerns relating to the references of the risk numbers in 5a and 5f on page 30 of the report.
74.14 The Corporate Manager for Internal Audit stated that he thought that this was just a matter of timing but would check the significant risk register to confirm this.
74.15 Councillor Horn queried how the Council was monitoring its invest to save programmes and whether there was a robust framework in place to be able to assess at any one time whether they were actually succeeding or not?
74.16 Councillor Gowrley added that he would like to see some feedback from the programme management of these schemes, what had been achieved and what lessons have been learnt from the process.
74.17 Councillor Welham sought clarification on the figure used for calculating new homes bonus in the medium-term financial strategy?
74.18 In response the Corporate Manager for Finance, confirmed that there were three potential scenarios shown for new homes bonus. The first scenario was the five-year average number of houses built as this was what the Council had delivered in the past. The projected completions – but this needed more work with the Planning Department to ensure that the numbers were tied up and finally the links to the council tax base. An additional piece of work needed to be done at the next cut-off date to make sure that these were all aligned.
By a unanimous vote.
It was RESOLVED:-
(i) That subject to any further budget variations that arise during the rest of the financial year, the following net transfers of £1,648k be approved:
a) Transfer from reserves of £5k being the net amount for the following specific earmarked reserves, referred to in section 5.8 and Appendix D of the report:
· £111k to Carry Forwards (Strategic Planning)
· £32k toWaste
· £10k toElections
· £122k fromPlanning for appeal costs
· £36k fromHomelessness
b) The remaining balance of the General Fund surplus of £773k be transferred to Growth and Efficiency Fund and £880k to the Business Rates Equalisation reserve.
(ii) That the revised 2018/19 Capital Programme referred to in Appendix E and section 5.19 of the report be approved.
Reason for Decision: To ensure that Members are kept informed on the current budgetary position for both General Fund Revenue and Capital.
Supporting documents: