Agenda item

2018/19 outturn

Report from the Cabinet Member for Finance.


The Cabinet Member for Finance presented his report which set out the budget outturn position at the end of 2018/19 in respect of the General Fund Revenue Budget, the Housing Revenue Account Budget and the Capital Programmes associated with both the General Fund and the Housing Revenue Account. He advised Members that the outturn report had already been approved by the Governance and Audit Committee on 21 June 2019 and Cabinet on 9 July 2019.


The Cabinet Member for Finance summarised the report, highlighting the in-year changes that had been made to the Council’s budget which increased the total budget to £19.502m. He gave an explanation as to how the Council had benefitted from the 100% business rate pilot scheme. The report outlined variances of £20,000 by directorate and set out budget carry forwards, which all related to specific items; these carry forwards had been agreed by the Governance and Audit Committee.


Committee members were advised that the surplus relating to the Housing Revenue Account had been transferred to reserves to provide additional internal funding for the HRA Capital Programme.


The report gave an updated position in respect of the Capital Programme, with the report showing carry forward amounts. The Cabinet Member for Finance drew members’ attention to the Local Priorities Reserve, which was funded by the New Homes Bonus, and a new crowd funding reserve that had recently been created.


Committee members were given the opportunity to ask questions and discuss different aspects of the report:


·           The authority did not budget for pensions; variations came from actuarial review and were shown as non-cash items meaning that they were reversed out before the amounts were declared for each account

·           The Housing Revenue Account bought professional services from the General Fund; the draw down was liable to change dependent on demand for those services

·           Right to buy was budgeted at an assumed level. There had been a stepped increase in tenants buying their property which was driven by changes to the discounts from which they could benefit

·           Void rates were budgeted at an assumed level. Work had been undertaken to improve the turnaround time, but this depended on the quality of the stock and the condition of those properties that became vacant

·           Rent write-offs arose from tenants’ poor performance of paying rent and tenant arrears. It was noted that if a debt had been written-off and the tenant reappeared those arrears would be written back on and would need to be cleared before they were to take a tenancy

·           Business rate income grew in 2018/19 because of the Council took part in a 100% business rate pilot; this exceeded the budgeted level because the council had made conservative predictions during budget-setting

·           Section 31 grants were provided by government to offset changes to the business rating system that would otherwise lead to losses for local authorities

·           The Valuation Office Agency undertook asset revaluation on a regular basis to reflect market changes on asset values. Any changes in valuation were reflected in depreciation changes

·           To avoid taxpayers becoming liable for non-cash items they needed to be removed from the accounts as accounting adjustments

·           Minimum Revenue Provision (MRP) was prescribed by government as 50 years and did not correlate with borrowing projections or the life of any asset

·           There was national debate about whether councils should set aside MRP for investment in assets that would return money back to councils

·           The only borrowing that the Council expected to undertake related to the Cummins site. To date, it had only been necessary to borrow internally but there would be a future need to go to the market and MRP would be factored in

·           The Housing Investment Programme for 2018/19 covered three years and included an allocation of £5m per annum to fund the council’s new build and property development ambitions; this had been overtaken by the housing delivery programme

·           The Governance and Audit Committee approved a carry forward in the HRA Capital Programme of £90k for Repairs Vehicles

·           During 2018/19 work had commenced on 7 housing schemes; the majority were now due to be completed in 2019/20 and budgets needed reprofiling to reflect the revised completion date

·           Members identified a potential ongoing issue with the spending of disabled facilities grant provision and requested a written update from the relevant Cabinet member


Action Point


Ø  The Cabinet Member for Communities, Health and Wellbeing to provide a written update setting out action that was being taken to reduce the underspend in respect of disabled facilities grant funding

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