Agenda item

(Director of Finance & ICT) To consider the attached report (FPM-015-2013/14).

The Assistant Director (Accountancy) presented the quarterly Financial Monitoring report for April to September 2013, which provided a comparison between the original profiled budgets for the period ended 30 September 2013 and the actual expenditure or income as applicable. The report provided details of the revenue budgets, the Continuing Services Budget, District Development Fund as well as the capital budgets including Major Capital Scheme.

The Cabinet Committee noted that the salaries budget showed an underspend of £44,000 or 0.4%. Investment income levels were slightly below expectation and significantly below the prior year. The Council had received £2.360m of the original £2.5m investment placed with Heritable Bank which brought the recovery up to 94.02%. A letter from the administrators had been received during September saying there would not be any further dividends until the end of the administration process and related litigation.

Within the Planning & Economic Development Directorate, income for pre-applications was £32,000 higher than the 6 month budget of £3,750 and Development Control income had also recovered to a £13,000 with future months looking encouraging. Building Control account was expected to return a deficit of over £30,000 unless there was a drastic improvement in income. Although as the account operated on a three year cycle it could continue to operate in deficit but there may come a time when the deficit had to be taken to the General Fund.  

Within Corporate Support Services Directorate Hackney, Carriage and other licensing income were both below expectations by £7,000 and £6,000 respectively and with fewer renewals within the year which it looked unlikely to make shortfall. Income from MOT’s carried out by Fleet Operations was £18,000 below expectations, with MOT income now expected to fall short by around £30,000.

Within the Housing Directorate, the Housing Repairs Fund showed an underspend of £364,000, but a larger proportion of the expenditure was seasonal falling in the winter months. This budget would be revised shortly, and there could be a saving realised.

From 1 April 2013 the Council had been entitled to a share of business rates collected and so monitoring of these amounts collected were now more important. The NNDR1 form set out the non-domestic rate estimated for the year and started with a gross yield of £40,208,899 which was then reduced by the various reliefs for charities and small businesses and an allowance for appeals to get to a net rate yield of £31,897,379. At the end of September the net rate yield had reduced by £198,841 and as the Council retains 40% of gains and losses this would mean a reduction in funding of £79,536. The cash collection were important to the Council, as they were required to make payments to the Government and other authorities based on their share of the rating list. These payments were fixed and had to be made even if no money was collected. Therefore, effective collection was important as this could generate a cash flow advantage to the Council. At the end of September the total collected was £20,161,989 and payments out were £15,946,900, meaning the Council was holding £4,215,089 of cash and so the Council’s overall cash position was benefitting from the effective collection of non-domestic rates. In summary, at the end of September the reduction in the overall value of the rating list was a cause for concern, but cash collection is going well

Within the Major Capital Schemes the Council was embarking on a House building programme primarily aimed at the development of difficult to let Garage sites. The first phase was due to commence in Waltham Abbey early 2014 subject to detailed planning approval being obtained. In conclusion, income was a little down on expectations but expenditure was too and at this point it was expected that actual expenditure would be rather closer to the originally budget than in recent years. The Committee was requested to note the Council’s financial position as of 30 September.

Resolved:

(1)       That the Quarterly Financial Monitoring Report for the period April to September 2013 be noted.

Reasons for Decision

To note the second quarter financial monitoring report for 2013/14.

Other options Considered and Rejected:

No other options were available.