Agenda item

(To receive a report by David Forbes (County Finance Officer) which describes the Council's financial performance for 2017/18 and makes proposals for the carry forward of over and under spendings into the current financial year.  The report and comments of the Board will be presented to the Executive on 3 July 2018)

Consideration was given to a report by the Executive Director of Finance and Public Protection which described the Council's financial performance for 2017/18 and made proposals for the carry forward of over and under spending into the current financial year.  The report and comments of the Board were to be considered by the Executive on 3 July 2018.

David Forbes, County Finance Officer, introduced the report and highlighted key areas for the Board's attention:-

·       Two Key Financial Performance Measures had not been met – Capital Receipts which was £3.97m short of its £8m target; and Internal Control which had one system – payroll – that had received a 'low assurance' rating for the year;

·       Over the four commissioning strategies (Readiness for School; Learn and Achieve; Readiness for Adult Life; and Children are Safe and Healthy), Children's Services had underspent by £0.948m;

·       Adult Care & Community Wellbeing had underspent by £1.483m;

·       There had been an underspend on the corporate provision for the national living wage of £9m as it was possible to meet this cost by using the Better Care Fund (BCF) within adult care.  This revenue underspend had been partly offset against the overspend, which was nearly £4m, to fund the shortfall in order to meet the £8m capital receipts;

·       The capital outturn for 2017/18 was noted – net capital expenditure was £53.087m which was £26.751m (33.5%) less than planned;

·       It was reported that the accounts were to be closed by the end of May this year rather than the end of July 2018;

·       It was confirmed that there were no issues in relation to Prudential Indicators;

·       The Council had planned to use £8.000m of flexible capital receipts in 2017/18 to fund transformation projects which would generate ongoing revenue savings to the authority.  However, this generated £3.970m less receipts than expected which was mainly as a result of the challenges faced when marketing properties.  The shortfall in the capital receipts targets needed to be funded from the revenue budget under current legislation regarding the flexible use of capital receipts;

·       It was explained that all under and overspendings on service revenue budgets of up to 1% would be carried forward without exception.  In line with previous years, Executive Directors had provided details of how they planned to use the 1% carry forward. It was confirmed that Executive Directors had delegated authority to approve the use of any 1% underspend in conjunction with the relevant Portfolio Holder; and

·       It was proposed to add the remaining allocation of £18.665m underspend to the Financial Volatility Reserve.  The Council's budget strategy envisaged adding an approximate £20m as part of the 2017/18 outturn finalisation.  It was explained that this would mean the financial volatility reserve would be £51m in the current year and current projects of £6.5m to be used to balance the budget and to use £21m in 2019/20 to do the same.

The Chairman thanked officers for a clear and concise report and presentation and invited Members to ask questions, during which the following points were noted:-

·       It was suggested that Members of the Board, in their capacity as Scrutiny Chairmen, consider providing an indication to the Executive of financial pressures in their own particular areas;

·       Although the winter maintenance budget overspent, the directorate had found the money to replace that from other budgets.  However, there would have been an option to deal with that through the revenue budget contingency;

·       The total reported as being available in schools was an accumulative figure.  Reserves could be drawn down for each school.  It was confirmed that there was a policy in place which allowed schools to carry forward up to £30k or 8% (whichever is greater) which allowed them to create some flexibility within their reserves.

The Chairman indicated that he would be abstaining on this item due to his position as Labour Group Leader and that he would be speaking to the item when it was considered at Full Council.

The Board agreed that they accepted the broad proposals set out within the report and agreed not to pass any comments to the Executive in relation to this item.  It was also agreed that individual Chairmen would approach respective Portfolio Holders in order to make suggestions to the Executive relating to their own areas.

RESOLVED

          That the report and recommendations to the Executive be supported.

At 1.00pm, Councillor C E H Marfleet and Mrs P J Barnett left the meeting and did not return.