Agenda item

(Director of Resources) To consider the attached report (FPM-003-2014/15).

The Director of Resources provided an overall summary of the revenue outturn for the financial year 2013/14.

The Director of Resources gave a short presentation to the Cabinet Committee regarding the funding position for the Collection Fund and the General Fund.

The Collection Fund account holds income relating to the Authority as well as the major preceptors (Essex County Council, the Police and Fire Authorities). These authorities notify the Council of their funding requirement and to ensure a degree of certainty the figures are fixed in advance of the start of the financial year. Any reductions in income such as successful appeals on Business Rates assessments, does not affect the General Fund in the year that they occur, but rather future years.

Consequently, with a deficit on the business rates collection fund occurring in 2013/14 because of a large change to the rating list relating to a pipeline that runs through the District, which was originally included in the Council’s rating list and a provision to cover future successful rating appeals.  The Councils portion of the Business Rates collection fund deficit at the end of March 2014 was some £394,000 which would need to be accounted for in 2014/15, thus adversely affecting the future funding available to the General fund. Additional Funding comes partly from the safety net payment generated by the fall in Business rates income (£169,000) but because it was accounted for in the General Fund shows in 2013/14.

The Assistant Director (Accountancy) advised that net expenditure (CSB) for 2013/14 totalled £14.219 million, which was £149,000 (1.0%) below the original estimate and £265,000 (1.9%) below the revised. When compared to a gross expenditure budget of approximately £75 million, the variances were restated as 0.2% and 0.35% respectively. There were also improvements in the funding position, an increase of £286,000 however this was not the full story as movements between the Collection Fund and the General Fund were governed by specific regulations.

Variances had arisen on both the opening CSB and the in year figures. The opening CSB was £375,000 lower than the revised estimate and the in year figures, £110,000 higher than the revised estimate. The salaries were overspent by £60,000 and the actual salary spending for the authority in total, including agency costs, was some £19.944 million compared against an original estimate of £19.884 million.

Whilst the General Fund was overspent by around £160,000 the HRA was underspent by around £100,000. The General Fund overspend was due in part to additional staffing in the Deputy Chief Executive directorate which was paid for by external funding secured too late to be included in the budget. However generally vacancy levels fell below the 2.5% allowed for in the budget. The underspend on the HRA fell mostly on the Housing Repairs Fund but when comparing to the Revised Estimate there was a General Fund underspend of around £180,000 as budgets had been adjusted for known variations and some recruitment took longer than expected .

The other significant CSB saving when compared to the revised estimate was an underspend of £213,000 on Housing Benefits due in part to adjustments relating to past years and the identification of overpayments. An additional amount has been put into the Bad and Doubtful debts provision to provide against a proportion of these debts becoming uncollectable.

The original in year CSB savings figure of £803,000 became an in year savings figure of £707,000. The largest item related to the Market at North Weald Airfield where an original CSB income loss of £174,000 became £348,000. There were a number of items representing additional income or savings such as a significant rental review at Brooker Road and savings on the waste management contract gate fees however these were offset by increased costs as a result of auto enrolment for pensions and reduced council tax court cost income. The actual in year CSB savings were lower than both the Original and Revised at £597,000 primarily because the gate fee savings did not materialise. The second half of the year saw an increase in food and garden waste recycling for which the gate fee charge of £63 was passed on to the Council by the contractor. This was an increase in recycling when compared to the two previous years and could be partly due to the mild wet winter.

The net District Development Fund (DDF) expenditure was expected to be £984,000 in the original estimate and £671,000 in the revised estimate. In the event the DDF showed net income of £431,000. This was £1,415,000 below the original and £1,102,000 below the revised. It was requested that £682,000 was carried forward. The DDF reduced between the Original and Revised position by some £313,000  mainly due to new items being identified during 2013/14. The three main items being £400,000 for section 31 grant relating to Small Business Rate Relief granted, a £209,000 one off saving for Non Domestic rates on the Civic Offices backdated to 2010 and offsetting expenditure for severance costs arising from the implementation of the new Directorate structure, of £211,000.

There were a number of items contributing to this underspend such as additional Development Control and Pre-Application charges (£62,000), additional monies relating to various grants from Central Government (£85,000), savings on the Audit fees (£44,000), savings on the Building Maintenance Programme (£86,000), transfer into the DDF of the residual balance on the Pensions Increase Reserve (£65,000) and additional Parking related income (£61,000).

Housing Revenue Account

The Assistant Director (Accountancy) advised that the Surplus within the HRA of £128,000 and £107,000 was expected within its original and revised revenue budgets respectively, the actual outturn was a deficit of £593,000. There were savings on Revenue Expenditure of £53,000; a reduction in garage rent income £7,000 and £32,000 in the reimbursement from the General Fund for grounds maintenance on council estates.

The reversal from the Major Repairs Reserve (MRR) to the HRA was lower than anticipated and was due to a correction made resulting from the 2012/13 final accounts audit and amounted to £416,000. This had had the effect of increasing the Balance on the MRR at the expense of the HRA itself. Although in 2014/15 the financing of the Capital programme would be reviewed and both the MRR and HRA could be put back to the position that they would have been in had this adjustment not been carried out. There was an underspend on the HRA Self Financing programme last year  for service improvements and enhancements and £112,000 was requested for carry forward into 2014/15.

RECOMMENDED:

(1)          That the overall 2013/14 revenue outturn for the General Fund and Housing Revenue Account (HRA) be noted;

(2)         That the carry forward of £682,000 District Development Fund expenditure be noted ; and

(3)         That the carry forward of £112,000 HRA Service Enhancement Fund expenditure be noted.

Reasons for Decision:

To note the provisional revenue outturn.

Other Options Considered and Rejected:

No other options available.