Agenda item

(a)       That the Committee notes the Revenue Budget Monitoring 2017/18 Month 9 report and confirms on this occasion that the issue which it wishes to have brought to the Cabinet’s attention is the need to consider the release of earmarked reserves which could support the 2018/19 Revenue Budget; and

(b)       That the Committee notes the Capital Programme 2017/18 Month 9 report and confirms on this occasion that the issues which it wishes to have brought to the Cabinet’s attention were identified during the earlier ‘Development of the Capital Programme’ report.

The Finance Manager introduced a report on the revenue budget monitoring position for 2017/18 as at Month 9 for the Council Fund and Housing Revenue Account (HRA), and Capital Programme, prior to consideration by Cabinet.

Revenue Budget Monitoring

On the Council Fund, the net in-year position was forecast to be £0.908m higher than budget, which was an increase of £0.062m from Month 8.  The reasons for the projected variances were set out in the report.  It was projected that 94% of planned in-year efficiencies would be achieved.

On the tracking of in-year risks and emerging issues, work to assess the impact on the 2018/19 budget had been reported to Cabinet in January and were included in budget proposals to be submitted to County Council on 20 February.  The risk to the winter maintenance budget was highlighted, following the recent adverse weather conditions.

On the HRA, in-year spend was projected to be £0.035m lower than budget, leaving a year end balance of £1.081m (above the recommended minimum level).

The Corporate Finance Manager provided an update on the review of reserves where work was nearing completion.  He said that all areas had been reviewed - not just those identified by the Committee - and involved complexities in tracking to establish terms and understanding commitments of spending profiles.  He summarised the status and purpose of the four areas of reserves (base level, contingency, earmarked and unearmarked) and was confident that there were sufficient levels of usable reserves to support the budget position for 2018/19.

The Chief Executive said that the outcome of the review - which had been subject to intense rigour and challenge - would be reported to Cabinet.  The recommendation would be to support the prudent release of some reserves, whilst retaining others to mitigate future risk.  The report to Cabinet and County Council would set out that the use of reserves and an increase in Council Tax were the only remaining options to balance the budget.  The challenge to school funding to partially offset pay and inflationary cost pressures was seen as a priority risk area.

Councillor Shotton said that it was fair to challenge unused earmarked reserves and that there should be a balanced judgement on the level of risk involved on each reserve.

Work on the review was welcomed by Councillor Jones who accepted that challenging reserves was not without risk.  He felt that other issues on the budget were more important and that the Committee should assess at the end of each financial year whether earmarked reserves were still warranted in the next financial year.

In response to questions, the Chief Executive gave an update on progress with the Single Status Agreement and the holding reserve, where work was nearing completion.

Councillor Peers, who was present in the public gallery, asked about the potential to review Stage 1 of the process to establish if anything further could be identified.  The Chief Executive said that completed stages 1 and 2 were now closed off, and he summarised the staged approach which was broadly supported by Members.  He explained that early planning and implementation of Stage 1 proposals had been necessary to allow the process to move forward and a high level of efficiencies against target to be achieved in-year.

Capital Programme

A summary of changes to the programme during 2017/18 reported a revised budget total of £59.422m.  During the past quarter, there had been a net increase of £1.245m.  Over the quarter, £1.289m of carry-forward adjustments into 2018/19 were recommended, giving a total amount of £4.116m.

RESOLVED:

(a)       That the Committee notes the Revenue Budget Monitoring 2017/18 Month 9 report and confirms on this occasion that the issue which it wishes to have brought to the Cabinet’s attention is the need to consider the release of earmarked reserves which could support the 2018/19 Revenue Budget; and

(b)       That the Committee notes the Capital Programme 2017/18 Month 9 report and confirms on this occasion that the issues which it wishes to have brought to the Cabinet’s attention were identified during the earlier ‘Development of the Capital Programme’ report.