Agenda item

Purpose of Report

To present to the Executive the third quarter’s performance up to 31 December 2017 on the Council’s general fund, housing revenue account, housing repairs service, capital programmes and to provide a review of key budget risk assessments.

Decision

That the Executive:

(1)       Notes the progress on the financial performance for the period 1 April 2017 to 31 December 2017 and the 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 appendices B, D and F.

(3)       Approves the proposed contribution of £50,000 to the Revenues and Benefits Shared Service reserve as detailed in paragraph 3.6 of the report.

(4)       Approves the proposed contribution of £100,000 to the Invest to Save reserve for Marketing Services across the authority as detailed in paragraph 3.7.

(5)       Approves the changes to the General Investment Programme as detailed in paragraph 7.5 of the report and the Housing Investment Programme as detailed in paragraph 7.10 of the report.

Alternative Options Considered and Rejected

None.

Reason for Decision

The forecast financial position of the Council for 2017/18 as at the third quarter up to 31 December 2017 was set out in paragraph 2.1 of the report. Further updates were noted as follows:

General fund revenue account

The general fund was currently projecting a forecast underspend of £457,856 as set out in the general fund summary attached to the report at Appendix A. 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 main variances were outlined in Appendix B to the report, with key variances summarised as follows:

·         interest payable – reduced expenditure of £79,650;

·         Christmas market – increased expenditure of £79,880;

·         City Hall Car Park – increased expenditure of £110,830;

·         Lincoln properties – increased income of £56,000;

·         City Hall – reduced expenditure of £132,440;

·         New Homes Bonus contingency – reduced expenditure of £102,640.

It was noted that the Corporate Management Team would undertake a review of all carry forward requests following confirmation of the final outturn, alongside a review of the resources available to support delivery of the Council’s Vision 2020 programme, which would be presented to the Executive in June 2018. In addition to these carry forward requests, there had been significant New Burdens grant funding received in the Revenues and Benefits Shared Service during the year. Many of these were to cover work already being undertaken by the Shared Service. It was therefore proposed to transfer £50,000 to the Revenues and Benefits Shared Service reserve to cover anticipated future reductions to the Department for Works and Pensions administration grant the authority received.

With an increasing focus on the commercialisation agenda, it was proposed that a further £100,000 be transferred into the Invest to Save reserve for Directorates to bid against for monies to assist in marketing services in order to protect and grow the Council’s key income generating areas.

A summary of key fees and charges income was set out in paragraph 3.4 of the report in relation to car parks, development management and building regulations, outlining current progress and the forecast variance for the third quarter of the financial year.

It was noted that the forecast outturn for the general fund would be £182,746 if all carry forwards and both earmarked reserve requests were to be agreed.

Towards Financial Sustainability Programme

The savings target included in the Medium Term Financial Strategy for 2017/18 was £3,500,000. Progress against this target, based on quarter three performance, showed that secured and confident projections totalled £3,530,390. This resulted in a current forecast over achievement of the target in 2017/18 of £30,390. Existing projects were being accelerated so that new projects could be developed.

Housing revenue account

The housing revenue account was currently projecting an in-year underspend of £211,970, which would increase general balances to £1,235,030 at the end of 2017/18. The assessed prudent minimum balance for the housing revenue account was currently £1,000,000. The components of the underspend were detailed in Appendix D to the report, with key variances noted as follows:

·         vacancy savings – reduced expenditure of £76,000;

·         Housing Repairs Service – trading surplus of £101,070.

General investment programme

Movements in the general investment programme since the last quarter were summarised in paragraph 7.2 of the report, which had increased overall planned expenditure in 2017/18 to £31,418,986. The following changes, which were over the approved limit for the Chief Finance Officer to approve under delegated powers, were proposed to the Executive:

·         CCTV – additional budget of £85,000 allocated to the scheme in 2017/18, funded through £75,000 reallocation of capital contingency and £10,000 from the Invest to Save reserve;

·         allotments – additional budget of £250,000 allocated to the scheme in 2018/19 funded through capital receipts;

·         Disabled Facilities Grants – additional funding of £66,612 allocated in 2017/18 from the Department for Communities and Local Government and £525,126 of Better Care Funding reallocated to revenue.

The table at paragraph 7.6 provided a summary of the projected outturn position for the general investment programme.

Housing investment programme

The last quarterly report approved a housing investment programme for 2017/18 of £24,340,053. Movements in the programme had since decreased overall planning expenditure in 2017/18 to £15,205,221 and a summary of the changes was outlined in the table at paragraph 7.9 of the report.

The projected position was set out in paragraph 7.12 of the report and the following points were noted:

·         the budget included £5.26 million for the 2017/18 New Build Programme. Works had commenced on the Monks Road development and 12 properties at Blankney Crescent were due to be handed over during February 2018;

·         the budget included £2.51 million for land acquisitions. £1.75 million was budgeted for the potential purchase of land off Queen Elizabeth Road. Ermine School was purchased during the second quarter for £769,000 and re-sold for £700,000.