Issue - meetings

To present the second quarter’s performance on the Council’s General Fund, Housing Revenue Account, Housing Repairs Service and Capital Programme.

Decision

That the Executive:

(1)       Notes the progress on the financial performance for the period 1 April 2019 to 30 September 2019 and the projected outturns for 2019/20.

(2)       Notes the underlying impact of the pressures and underspends identified in paragraphs 3.2, 4.2 and 5.2 of the report, as set out in Appendices B, D and F respectively.

(3)       Approves the changes to the General Investment Programme and Housing Investment Programme as detailed in paragraphs 7.4, 7.5, 7.11 and 7.12 of the report.

(4)       Approves the proposed contributions to and from reserves.

None.

Updates were reported as follows:

General Fund Revenue Account

For 2019/20 the Council’s net General Fund revenue budget was set at £13,655,090, including a planned contribution from balances of £554,410, resulting in an estimated level of general balances at the year-end of £2,452,134.

The General Fund summary was currently projecting a forecast overspend of £86,698, as set out in Appendix A of the report. This forecast variance was the result of a number of forecast year-end variations in income and expenditure against the approved budget. Full details of the main variances were provided in Appendix B of the report while the key variances were noted as follows:

·         Housing Benefit overpayment reduction income - £368,000;

·         Houses in Multiple Occupation reduced income - £74,260;

·         Interest Payable reduced expenditure - £200,000

·         Crematorium additional income - £125,990

·         Car parking income - £119,000

The most significant of the forecast variations was the reduction in the level of housing benefit overpayment being raised. Whilst this was positive in that the number of overpayments were reducing, this in turn created a budgetary pressure. This was a continuation of a trend from 2017/18 and 2018/19 with the transition of benefits customers to Universal Credit and the use of ‘real time’ information which meant that the level of overpayments raised had drastically reduced. The budget pressure was as a result of the consequential reduced income from reclaiming the overpayment from the claimant and would require a budget realignment as part of the Medium Term Financial Strategy.

Although forecast outturn for the General Fund was a shortfall of £86,698, at this stage in the financial year forecast outturns were difficult to predict and often subject to volatility. This would continue to be monitored, with a further report to the Executive on this issue as part of the quarter three update report.

Further to  additional contributions from reserves there were also a number of contributions from earmarked reserves that were required, subject to outturn, as set out in paragraph 3.5 of the report.

Towards Financial Sustainability Programme

The savings target included in the Medium Term Financial Strategy for 2019/20 was £4,650,000. Progress against this target, based on quarter two  performance, showed that secured and confident projections totalled £4,631,710, which resulted in a current forecast under achievement of  ...  view the full minutes text for item 66