Agenda item

(Director of Resources) To consider the attached report (FPM-003-2017/18).

The Assistant Director (Accountancy) provided the Cabinet Committee with an overall summary of the revenue outturn for the financial year 2016/17.

The net expenditure (CSB) for 2016/17 totalled £14.039 million, which was £787,000 (5.9%) above the original estimate and £71,000 (0.5%) above the revised. Whilst the overspend compared to the revised appeared small there was in fact a sizeable underspend on ongoing activities and because of this it was proposed to provide an additional sum of £1 million for capital funding.

The funding position was less easy to establish since the part retention of business rates and the actual funding was down by £217,000 when compared to the revised position. There was an in year surplus on the business rates collection fund which had brought the overall deficit down from £1.514 million to £87,000. There was still a significant amount set aside for Business Rate appeals and a re-assessment of the level of the provision required was carried out during the final accounts process.

The medium term financial strategy had estimated that the Council’s portion of the deficit on the business rates collection fund would be £200,000 and on the council tax collection fund there would be a surplus of £210,000. In the event the business rates collection fund deficit at the end of March 2017 was lower at £35,000 which would need to be paid back over the next two years, the Council Tax collection fund showed a surplus of £209,000 which would be paid into the General Fund in future years. The combined net position was £164,000 better than was anticipated.

The Continuing Services Budget (CSB) expenditure was £215,000 below the original estimate and £929,000 below the revised. Variances had arisen on both the opening CSB and the in year figures. The opening CSB was £871,000 lower than the revised estimate and the in year figures, £58,000 lower than the revised estimate. When measured against the Original Budget, salaries were underspent by £529,000. Actual salary spending for the authority in total, including agency costs, was some £21.97 million compared against a original estimate of £22.499 million. About three quarters of this underspend fell on the General Fund with Resources and Neighbourhoods recording the highest values. When comparing to the Revised Estimate there was an underspend of £157,000, all of which fell on the General Fund, though some salary costs were DDF and this showed a small underspend.A contingency had been included in the General Fund of £150,000 for potential settlement agreements little of this had been spent in the end.

The addition to the General Fund Bad & Doubtful debts provision was £83,000 less than expected. Housing Benefit Overpayment debts had increased marginally and more than half of the Sundry Debts outstanding were less than a month old, therefore could be expected to be mostly paid. 

There were a number of other underspends such as Housing Benefits £133,000, additional income, mostly rents £112,000, various consultancy costs £103,000, business rates £32,000, Grounds Maintenance £29,000, and as always a lot of minor amounts under £5,000 on various headings. It was proposed, that because this underspend has occurred, it was sensible to provide some additional funding to the General Fund capital programme of £1 million which wiped out the underspend plus an additional £288,000 which still left the General Fund balance at £6.207 million which was comfortably above the target set in the Medium Term Financial Strategy.

The original in year CSB growth figure of £538,000 became an in year growth figure of £630,000. This was primarily due to additional expenditure required to support the Waste Management Contract (£427,000) though there was some compensatory additional income included in areas such as the technical agreement with major preceptors (£200,000) commercial and industrial rents (£135,000) and Development Control fee income (£70,000).

The net District Development Fund (DDF) expenditure was expected to be £698,000 in the original estimate and £1,096,000 in the revised estimate. In the event the DDF showed net income of £446,000. This was £1,144,000 below the original and £1,542,000 below the revised, with requests for carry forwards totalling £1,301,000, a net underspend of £241,000 was shown.

The DDF increased between the Original and Revised position by £398,000, overall this had not been significant but there were some large swings on both income and expenditure. On the Income side, additions relating to Development and Building Control (£150,000), Various commercial and industrial rents (£122,000), various other grants and income (£86,000). There was also some reprofiling of expenditure into future years particularly in relation to the staffing costs relating to the technical agreement. Offsetting these were amounts brought forward from 2015/16 and additional resources provided for the Local Plan (£626,000),Waste and Recycling (£144,000) and an amount of £116,000 in relation to the income from the major preceptors that had been taken into the CSB with a significant number of other more minor items of both additons and reductions to the programme.

The difference between the revised position and the outturn position was a reduction of £1,542,000. During February and March around £928,000 in grants and contributions were received which had been applied for but not confirmed in time for the budget setting process. These monies had been added to the DDF and were intended for spending in 2017/18. The largest of these was for the Garden Town funding, of which £665,000 was carried forward into 2017/18. All of these grants and contributions related to the Neighbourhoods Directorate. Other income variations were additional income from the agreement with major preceptors £158,000, unspent new burdens grant required in 2017/18 £127,000, additional commercial and industrial rents £63,000. There were also two larger underspends relating to building maintenance £92,000 and the local plan £66,000. The overall position on the DDF with the balance as at 31 March 2017 was £4.188 million.

Spending from the Invest to Save Reserve was £219,000, which was £101,000 below the revised estimate of £320,000. There were carry forward requests of £107,000; the largest relating to the ICT infrastructure for the new car park management contract of £45,000. There was also a small overspend relating to the payment kiosks at the Civic Offices. The balance on the reserve was £425,000 at the start of 2016/17. It was agreed as part of the 2017/18 budget process to add £200,000 and having spent £219,000 leaves the year end balance at £406,000.

A deficit within the HRA of £447,000 and surplus of £494,000 was expected within its original and revised revenue budgets respectively, the actual outturn was a surplus of £651,000. There were savings on Revenue Expenditure of £121,000 when compared to the revised position. There were savings on sheltered unit management (£43,000), bad and doubtful debt provision (£26,000), grounds maintenance (£16,000), gas and electricity (£10,000) and Caretaking and Cleaning (£9,000). Income from Dwelling Rents was up by £137,000 though other income was down by £103,000, the latter relating to management and service charges. The HRA started the new financial year in a slightly better position at £3.85 million. There was still significant uncertainty facing the HRA going forward with continued 1% rent reductions and the potential high value void levy.

The Cabinet Committee advised that any carry overs that were 2/3 years old would require robust justification to retain the funds; otherwise they would be placed back into the General fund.

RECOMMENDED:

(1)          That the provisional 2016/17 revenue outturn for the General Fund and Housing Revenue Account (HRA) be noted;

(2)          That £1 million from the General Fund be used to finance capital expenditure in 2016/17; and

(3)          That as detailed in Appendix E, the carry forward of £1,301,000 District Development Fund and £107,000 Invest to Save Reserve expenditure be noted.

Reasons for Decision:

To note the provisional revenue outturn.

Other Options Considered and Rejected:

Not to use the proposed £1 million additional funding for general fund capital expenditure.