Agenda item

Report number HOF236 by the Head of Finance.                          (Enclosure)

The Head of Finance presented report number HOF236 and circulated an addendum which incorporated updated information as a result on ongoing closedown activity.

The report detailed the revenue and capital outturn for both the General Fund and the Housing Revenue Account and provided commentary on the key variances.

General Fund - Revenue

The projected general fund revenue outturn was £16m against a budgeted spend of £16.1m. Members’ attention was drawn to the revenue contribution of £821k towards the capital programme expenditure including a contribution to fund the improvements works at South Kesteven Community Point.

The General Fund also had a number of reserves which were identified for specific uses around priority outcomes of the authority. The report detailed year end balances against each reserve heading. Headings would need reviewing as part of the budget setting process to ensure that they were fit for purpose and reserves set at an appropriate level.

The report split revenue funding into service areas where the key variances under that heading were listed. The Head of Finance explained that in some instances some entries were posted above the line for service costs in accordance with accounting treatment for example differences in relation  to the revaluation of assets. Accounting adjustments are then removed from the operational expenditure entries so that there is no impact on council tax payers.

Housing Revenue Account

Housing Revenue Account income was primarily raised through dwelling rents. In 2012/13 a collection rate of 98.7% was achieved and the void rate driven down to 1.02%.

In respect of expenditure an overall underspend was reported but set-asides have been established to continue outstanding works during 2013/14. The surplus would be split between a loan repayment reserve (£1.685m) and an HRA improvement reserve (£500k).

General Fund – Capital

The outturn figure for the general fund capital programme was £5.534m within which a number of variances were reported.

Members’ attention was drawn to the ‘Grow the Economy’ capital projects. The South Kesteven Community Point was completed in March 2013 and funded through the general fund capital programme. The Bourne Core Area project (also funded through the programme) was scheduled for completion by August 2013. Underspends relating to Grantham Growth, which was identified as a longer term project, would carry forward 2013/14.

Housing Revenue Account – Capital

A variance of £424k was reported against a budgeted spend of £4.441m which led to an outturn figure for 2012/13 of £4.835m. Key projects highlighted included:

·         A passenger lift and refurbishment works at Rectory Close, Barrowby

·         A mobility scooter store at Hilary Close, Stamford

·         Changes to the roofing programme to operate on a geographical basis

Reserves and balances

The council had a number of capital and revenue reserves which each had their own policy; these were set out in report number HOF236. The Head of Finance reported that the General Fund Capital Reserve and its remaining balance had been fully utilised. Going forward the capital programme would be primarily funded through the useable capital receipts reserve. Work was underway through the asset management plan to ensure the replenishment of the reserve to contribute to the capital programme.

Members’ attention was particularly drawn to the Priority Reserve and the Maintenance Reserve. The Priority Reserve was the main source of funding for projects in support of the Council’s corporate priorities. The Maintenance Reserve was being created as part of the closedown of accounts and would be used during the year to meet unforeseen costs. This reserve would be replenished annually as part of the closedown process.

During 2012/13 all Housing Revenue Account capital spend was funded by the major repairs reserve. Another contribution would be made to that in 2013/14.

Councillors asked about the potential impact following the withdrawal of the Grantham Area Action Plan and the suspension Site Allocation Policies Plan. Members were informed that costs were funded through planning delivery grant, which was a balance sheet item. As funding was not drawn down the balance would remain  and carry forward.

Officers responded to other questions and comments on the budgeted spend for Property Development and Building Control and the impact of revaluation of assets on continuity within financial reporting.

Members complemented the readability of the document. Officers were asked to re-label the “Bedroom Tax Project” on page 2 of Appendix D “Spare bedroom subsidy project”.

The Committee agreed to accept the report.