Agenda item

(a)       That the Committee notes the recommendations in the Cabinet report for Revenue Budget Monitoring 2018/19 Month 4 and confirms that there are no other issues which it wishes to have raised at Cabinet; and

(b)       That the Committee notes the Capital Programme 2018/19 Month 4 report and confirms on this occasion that there are no issues which it wishes to have brought to the Cabinet’s attention.

The Finance Manager (Strategy Accounting & Systems) and Interim Finance Manager - Technical Accountancy presented a joint report on the revenue budget monitoring position for 2018/19 month 4 for the Council Fund and Housing Revenue Account (HRA), and an update on the Capital Programme 2018/19 at month 4.  Both would be considered by Cabinet on 25 September 2018.

Revenue Budget Monitoring

On the Council Fund, the actual net in-year position expenditure forecast showed a £2.680m surplus which included the positive impact of a £1.400m contribution arising from the approved change to the Minimum Revenue Provision (MRP) accounting policy and a £1.940m receipt for a VAT rebate.  Both sums were recommended for allocation to the Contingency Reserve to support the Medium Term Financial Strategy as part of strategic budget options discussed at the recent Member workshop.  This would leave an operating deficit of £0.660m.

The table set out the projected position by portfolio, prior to the transfer of the above two sums, with the projection for Out of County Placements shown on a separate line for greater clarity.  Progress against the planned in-year efficiencies showed that 98% were expected to be achieved, which was above the target.  An update on other in-year issues highlighted an additional amount of £1.084m to be requested from the Contingency Reserve to meet the cost of the nationally agreed pay award, over and above the 1% uplift provided for within the budget for 2018/19.  The end of year balance of Contingency Reserve was projected to be £8.145m although £0.100m would be requested to support ongoing work on child protection.  It was to be recommended that an underspend in the Carbon Reduction Commitment budget should be ringfenced to support the development of solar farms, as previously reported to Cabinet.

The Chief Executive welcomed progress on efficiencies and explained that there was some uncertainty on the timing of County Hall cost reductions due to the timing of the demolition work.  Reflecting on previous discussion on the importance of maintaining adequate Contingency Reserve levels, he referred to the additional budget pressure on the national pay award which was a liability on all councils as there had been no financial support from the UK or Welsh Government (WG) as yet.

On the HRA, in-year spend was projected to be £0.007m higher than budget, leaving a year end balance of £1.165m which was above the recommended minimum level.

Councillor Jones welcomed the separation of Out of County Placement costs and drew attention to an inaccuracy in the total overspend for Streetscene & Transportation.  In response to questions, clarification was given on the timing of the MRP policy change and notification of VAT rebate, both of which were unallocated one-off amounts for 2018/19 to be allocated to Contingency Reserves.

The Finance Manager agreed to provide Councillor Bateman with further details of the additional cost of waste leased vehicles.  She also agreed to respond to Councillor Johnson’s request for more information on Pest Control service costs which he said were difficult to track.  It was noted that this may be due to portfolio changes.

The Chief Executive provided clarification to the Chairman on the one-off additional transport costs following the closure of John Summers High School.

Councillor McGuill asked whether dual-use sports centres met the criteria for the VAT rebate on some sporting exemptions.  The Chief Executive said that this would be followed up.

Capital Programme

A net increase of £8.420m was reported in the Programme for 2018/19 which resulted in a revised budget of £76.394m.  The main changes during the period took account of notification of funding allocations not available at the time of budget-setting, such as the Local Transport/Road Safety grant from WG.  An update was given on a change to availability of the Affordable Housing grant which had been replaced by revenue support for equivalent borrowing over a 29 year period.

An update on capital expenditure compared to budget showed a projected underspend of £0.047m on the Council Fund and a break even position on the HRA.  At this stage, no significant changes were anticipated by year end.  Also highlighted were a carry forward amount of £0.074m for Theatr Clwyd into 2019/20 and an additional capital allocation of £0.500m towards ventilation systems at Unity House in Ewloe in advance of the office move.  Table 5 indicated a current funding shortfall of £8.719m for approved schemes over the three year period, which did not include unreleased capital receipts.  As requested in the Notice of Motion to Council, a breakdown showed investment in county towns also noting additional expenditure allocated in the Welsh Housing Quality Standard.

On the latter, Councillor Jones gave a reminder of the need to report on both revenue and capital expenditure.  Officers explained that both would be reviewed and reported as the year progressed.

Following a query by the Chairman, it was explained that the additional funding for Unity House was to undertake essential work to support a different type of use for the building.

In response to Councillor Heesom’s query on the approach to prudential borrowing for Unity House, officers explained that this was subject to ongoing review and that the release of any capital receipts would offset the need to borrow  and would be reported through treasury management as they concluded.

RESOLVED:

(a)       That the Committee notes the recommendations in the Cabinet report for Revenue Budget Monitoring 2018/19 Month 4 and confirms that there are no other issues which it wishes to have raised at Cabinet; and

(b)       That the Committee notes the Capital Programme 2018/19 Month 4 report and confirms on this occasion that there are no issues which it wishes to have brought to the Cabinet’s attention.