Agenda item

Financial Overview and Forecast as 30 September 2018

To consider the report of the Portfolio Holder for Finance.

Minutes:

Documents:

·         Report of the Portfolio Holder for Finance

 

Discussion:

·         A larger overspend at year end was being forecast at the end of September than had previously been reported

·         The Committee sought assurance around savings proposals

·         There has been a relaxation in the use of capital receipts and officers were asked if it was possible to use these retrospectively for the period of the Directive?  £2.6M had been used and this was made up of both in year and retrospective receipts.  A further question was raised that if an asset had been disposed of since April 2016, would this have been capitalised or accounted for in a different way.  A report would be submitted to Cabinet shortly.  The WAO commented that it would be difficult to go back to previous years to alter the way in which the receipt was accounted for and that the guidance should be checked.

·         The Committee had been advised that a Capital Receipts Policy would be available for the next meeting of the Finance Scrutiny Panel – Members asked whether this would detail potential capital receipts and actions for asset disposal including the County Farms Estate.  It was confirmed that the Farms Policy had sufficient flexibility for assets to be considered for disposal   There was also a general policy and it must ensure that guidance is adhered to.  The Portfolio Holder stated that policies should be flexible.  However, using capital receipts now would lead to higher borrowing in the long term.  There would be an impact on the revenue budget and Members should be aware of the consequences.  It was noted that the revised Minimum Revenue Policy would have a similar effect.

·         Members were concerned at the projected reduction in the level of reserves.  The level was still within the limits agreed by Cabinet.

·         The report details budget levels by directorate but transformation costs are attributed to central activities – will this always be the case?  The Head of Finance informed Members that the Management of Change budget was held within central activities and would be reported there for the time being until such time as transformation occurs within services

·         The Committee remain concerned that balancing the budget has been due to windfalls and that this cannot be relied upon.  There has been a reduction in the projected overspend but this is due to an injection of funds.  The projected overspend within Children’s Services has increased by a further £500K.  Schools delegated budgets are also causing concern and concern was expressed that parents are being relied upon to fund activities within schools.

·         The Portfolio Holder for Finance reminded the Committee that the Funding Formula is being reviewed – there may be some schools who will win, others may lose.  Transitional arrangements are to be put in place.

·         The WAO noted the discussion regarding the budget by the Finance Scrutiny Panel but reminded the Committee that the long term position was key.  Reserves can only be spent once.  The need for pace and change was reiterated.  The Authority cannot continue postponing strategic decisions otherwise reserves will be further eroded.  It is unlikely that the financial position will improve in the next few years.  The easy decisions have already been made.

 

Outcomes:

·         The report was noted

 

 

 

Supporting documents: