Agenda item

To consider the Council’s financial outturn.  

1.   That the General Fund outturn for 2017/18, the financing of the capital programme and the annual treasury management report and performance be NOTED.

2.   That the transfers to and from earmarked reserves be APPROVED.

8.1             The report of the Head of Finance and Asset Management, circulated at Pages No. 19-41, highlighted the Council’s financial performance for 2017/18 and set out both the general fund and capital outturn positions. Members were asked to note the general fund outturn for 2017/18, the financing of the capital programme and the annual treasury management report and performance; and to approve the transfers to and from earmarked reserves.

8.2             The Head of Finance and Asset Management explained that the report detailed the final outturn position for the 2017/18 financial year, as well as addressing the movement on reserves, and requested Member approval for the creation of newly requested reserves or additions to existing reserves that fell outside of the previously approved sum. The report also sought to confirm the full year progress against the capital programme, and the sources of finance used in delivering that programme, as well as to report the performance of the treasury management function in 2017/18 in line with the requirements of the code of practice.

8.3             Attention was drawn to Table 1, Page No. 21, which showed the general fund outturn position. The position for direct service expenditure showed a positive variance of £1,080,281 which was mainly attributable to the major items such as: an underspend on the employees full year budget as a result of staff turnover and vacancies in most service groupings; an underspend on premises as a result of savings on utilities and business rates paid; savings on transport across all service areas from reduced car allowance scheme costs and reduced business mileage; and additional levels of income of £894,361 over the budgeted provision. The majority of ‘fees and charges’ budgets, with the exception of planning fees, had been delivered on budget during the year. The large variance was therefore as a result of substantial external grant income being received during the year. The Head of Finance and Asset Management explained that the Council had received a number of new burdens grants from the government but had also attracted significant service specific grants, particularly in relation to the delivery of the requirements for infrastructure and the Joint Core Strategy. In addition, the Council had taken on accountable body status for the Gloucestershire wide ‘Places of Safety’ funding so had received a transfer of funding totalling £449,000.

8.4             Members were advised that a breakdown of Council reserves was shown at Appendix B to the report and was grouped under strategic headings so as to provide a better understanding of the intended use of monies set aside.  Total revenue reserves stood at £10.61 million as at the end of March 2018 and included earmarked reserves, planning obligations and the general fund working balance; the increase in overall revenue reserves totalled £2.56 million and was as a result of a number of factors including in-year surplus within the general fund; and developer contributions, expenditure against contributions already received and expenditure on existing reserves of £1.01 million. In addition, the Head of Finance and Asset Management referred to the capital programme which had been substantial in the last few years. This had been highlighted in the level of capital expenditure incurred in 2017/18 which had totalled £15.93 million; to date the bulk of expenditure had been on the purchase of further investment properties and the refurbishment of the Public Services Centre. The summarised capital programme was shown at Appendix C to the report together with the sources of finance used. In terms of treasury management, a detailed report was attached to the Agenda at Appendix D; it set out the economic environment, a number of changes introduced into the sector, local performance and a number of prudential indicators. Attention was drawn to the fact that the in-year performance of treasury investments had resulted in an average return of 0.98% and total income of  £192,000 which was £165,000 above the budget for the year and reflected the range of investments made. In order to part fund the investment in commercial property, significant borrowing of £21 million had been undertaken; however, the Council’s strategy had kept borrowing costs within £60,000 for the year which was £24,000 below target. In terms of the financial performance indicators, the Head of Finance and Asset Management was pleased to report continued high performance in the speed of payment of invoices; the outturn performance of 94.56% had again exceeded target. In addition, the sundry debt position had fallen by approximately £6,000 across the financial year taking the amount outstanding to the lowest year end position for a number of years.

8.5             Referring to the capital programme, a Member noted that there was an underspend of £170,113 against the remaining capital balances from the community grants programme. She was aware that the Council no longer had a Community Grants Working Group and, as such, she asked that the Executive Committee receive an update on the committed grants so Members could see what was happening with them. The Head of Finance and Asset Management confirmed that he would provide that at a future meeting. Another Member noted that the employees’ budget was underspent and that there were vacancies in most service groups; she was of the view that the Council had great commitment from its staff but there was a need for more staff in many areas and she questioned what was being done about this. In response, the Head of Finance and Asset Management advised that, depending on the level of Officer being appointed there was a notice period which could be from one to three months and, unfortunately, this often left a gap. Managers tried to advertise and appoint as quickly as possible to ensure capacity was retained but sometimes this was not possible. In addition, the Chief Executive explained that other options were sometimes considered rather than replacement of staff, i.e. changes in structure/job descriptions, but whatever the way forward Managers tried to ensure it was actioned as quickly as possible.

8.6             Accordingly, it was