Agenda item

Purpose of Report

To present to the Executive the second quarter’s performance, up to 30 September 2017, on the Council’s general fund, housing revenue account, housing repairs service and capital programmes.

Decision

That the Executive:

(1)          Notes the progress on the financial performance for the period 1 April 2017 to 30 September 2017 and projected outturns for 2017/18.

(2)          Notes the underlying impact of the pressures and underspends identified in paragraphs 3.2, 4.3 and 5.2 of the report and associated appendices.

(3)          Approves, in principle, the carry forward request of £8,000 for the ‘Charter Project’ at the Guildhall.

(4)          Approves the changes to the general investment programme, as detailed in paragraph 7.5 of the report.

Alternative Options Considered and Rejected

None.

Reason for Decision

The Council’s Financial Procedure Rules require members to receive, on a quarterly basis, a report prepared jointly by the Chief Finance Officer and Corporate Management Team commenting on financial performance to date.

In terms of the general account, the general fund summary was currently projecting a forecast underspend of £141,404. This variance was the result of a number of forecast year-end variations in income and expenditure against the approved budget, summarised as follows:

·         Towards Financial Sustainability Programme – savings target underachievement of £58,300;

·         Interest payable – reduced expenditure of £74,390;

·         Bus station – increased expenditure of £40,000;

·         City Hall car park – increased expenditure of £110,830;

·         Lincoln properties – increased income of £49,820;

·         City Hall – reduced expenditure of £92,320.

As the forecast outturn for the general fund was showing a forecast underspend of £141,404, subject to outturn, a carry forward request of £8,000 was considered for the ‘Charter Project’ at the Guildhall. This amount was proposed to be spent on restoring the historic charters at the Guildhall to enable them to be displayed to the public. It was noted that this work would cross into 2018/19 and therefore, if not complete by the end of the financial year, this money would be required in 2018/19. The forecast outturn for the general fund would therefore be £133,404.

The housing revenue account was currently projecting an in-year underspend of £50,051 which would increase general balances to £1,073,150 at the end of 2017/18. The assessed prudent minimum balance for the housing revenue account was currently £1 million. The components of this underspend were summarised as follows:

·         Vacancy savings – reduced expenditure of £123,000;

·         Reduced requirement for in year DRF of £200,000;

·         Rents – reduced income of £213,000;

·         Repairs – amendment of accounting policies on capital spend £838,000;

·         Depreciation – revaluation of housing stock of £1,211,000.

For 2017/18 the Council’s housing repairs service net revenue budget was set at zero, reflecting its full cost recovery nature. The service was forecasting a breakeven position in 2017/18 at quarter two. It was noted, however, that this prediction had been made on the basis that the billing process for the second quarter had not yet fully concluded.

Further information relating to earmarked reserves, the capital programme and the housing investment programme was set out in the report.

Work was currently taking place to establish, through an evidence-based model, how much the City Council had contributed to the local economy.