Agenda item

Purpose of Report

 

To present to the Executive the provisional 2017/18 financial outturn position on the Council’s revenue and capital budgets, including:

 

·         General Fund

·         Housing Revenue Account

·         Housing Repairs Service

·         Capital Programmes

 

The report also provided a review of the key budget risk assessments.

 

Decision

 

(1)       That the provisional 2017/18 financial outturn for the General Fund, Housing Revenue Account, Housing Repairs Service and Capital Programmes, as set out in paragraphs 3 to 7 of the report, and the reasons for any variances, be noted.

 

(2)       That the proposed transfer to the General Fund earmarked reserves in paragraphs 3.6, 3.8, 3.9 and 3.11 prior to reporting to the Executive be approved.

 

(3)       That the proposed transfer to the Housing Revenue Account earmarked reserve in paragraph 4.4 of the report be approved.

 

(4)       That the financial changes to both the General Investment Programme and the Housing Improvement Programme, as set out in paragraphs 7.3, 7.4 and 7.10 of the report, above the 10% budget variance limit be delegated to the Chief Finance Officer.

 

Alternative Options Considered and Rejected

 

None.

 

Reason for Decision

 

General Fund

 

For 2017/18 the Council’s net General Fund revenue budget was set at £10,435,620, which included a planned contribution from balances of £702,440 resulting in an estimated level of general balances at the year-end of £1,609,364.

 

The financial performance quarterly monitoring report for quarter three predicted an underspend against the revised budget, exclusive of approved carry forwards, of £457,856. The provisional outturn for 2017/18 indicated that an increase in that underspend of £129,682 had occurred, resulting in an overall variance of £587,538 provisional underspend which represented a variance against the revised budget of 5.6%. Full details of the main variances were appended to the report, with key variances noted as follows:

 

·         car parking – reduced income of £290,000;

·         waste collection/street cleansing – increased expenditure of £69,990;

·         Crematorium – increased income of £152,360;

·         Christmas market – increased expenditure of £56,180;

·         City Hall – reduced expenditure of £177,280;

·         business rates – increased income of £279,710;

·         revenues and benefits (net of bad debt provision) – reduced income and expenditure of £73,400;

·         interest payable – reduced expenditure of £137,960;

·         new homes bonus contingency – reduced expenditure of £102,640.

 

Details regarding the proposed transfer of earmarked reserves in respect of the General Fund were set out in the report at paragraphs 3.6, 3.8, 3.9 and 3.11 of the report.

 

Housing Revenue Account

 

For 2017/18 the Council’s Housing Revenue Account net revenue budget was set as a deficit of £64,170, resulting in an estimated level of general balances at the year-end of £1,023,099.

 

The financial performance quarterly monitoring report for quarter three predicted an underspend of £211,970. The provisional outturn for 2017/18 now indicated an underspend of £616,377. This would result in Housing Revenue Account balances at 31 March 2018 of £1,639,476. The main reason for the additional resources over and above the position forecast at quarter three was an increasing trading surplus repatriated from the Housing Repairs Service and an increased underspend on supervision and management relating to the Keir profit share and additional vacancies. Main over and underspends included in the provisional outturn were detailed in Appendix D attached to the report, with key variances summarised as follows:

 

·         trading surplus on Housing Repairs Service repatriated to the Housing Revenue Account – additional income of £253,209;

·         Kiers profit share contribution - £126,000;

·         supervision and management - £154,000.

 

The proposed transfer of earmarked reserves in respect of the Housing Revenue Account was outlined in paragraph 4.4 of the report.

 

General Fund Investment Programme

 

The revised General Fund Investment Programme for 2017/18 was approved in the Medium Term Financial Strategy 2018-23 which amounted to £31,418,986. Movements in the programme since the approval of the revised budget decreased actual capital expenditure in 2017/18 to £29,098,005 with a summary of changes set out in paragraph 7.2 of the report.

 

Changes requiring Executive approval were noted as follows:

 

·         play equipment Queen’s Park – new scheme in 2017/18 to purchase new play equipment at Queen’s Park play area. The budget for this was £22,509 and was funded through Section 106 Agreement funding of £8,734 and Direct Revenue Financing of £13,775;

·         disabled facilities grants - £216,788 of Better Care Funding reallocated from revenue in 2017/18 and then subsequently re-profiled into 2018/19.

 

It was noted that new projects agreed by the Strategic Plan Implementation Team were subsequently subject to Executive approval. The following projects had been put forward for consideration as part of the Capital Programme:

 

·         tree memorial – a new scheme to purchase a metal memorial tree for the Crematorium. The budget for this was £20,000 in 2018/19, to be funded through Direct Revenue Financing;

·         noise reduction equipment – a new scheme in 2017/18 to purchase new noise reduction equipment. The budget for this was £14,060 and was funded through Direct Revenue Financing;

·         Broadgate lift refurbishment – a new scheme starting in 2017/18 and being completed in 2018/19 for replacement lifts at Broadgate car park. This was being funded through £220,000 of Direct Revenue Financing, existing budget from the Planned Capitalised Works budget of £10,000 and a further reallocation of £8,498 from the Planned Capitalised Works budget in 2018/19.

 

Housing Investment Programme

 

The revised Housing Investment Programme for 2017/18 as approved in the Medium Term Financial Strategy 2018-23 amounted to £15,204,221. Movements in the programme since the approval of the revised budget decreased actual capital expenditure to £10,706,618 in 2017/18.

 

Changes requiring Executive approval were set out in Appendix K of the report and were summarised as follows:

 

·         movements back to available resources;

·         movements within the financial year;

·         various re-profiles to and from future years.

 

Councillor Ric Metcalfe, Leader of the Council, queried how the economic value of the Council as an employer and its expenditure and investment in the city could be evaluated in respect of its contribution to the local economy. It was noted that an initial piece of work had been completed in liaison with the University of Lincoln. It was understood that there would be a resource implication for the University to progress with the project further, which the Chief Executive agreed to investigate.