Agenda item

(Director of Resources) To consider the attached report (FPM-003-2015/16).

The Assistant Director (Accountancy) provided an overall summary of the revenue outturn for the financial year 2014/15.

The net expenditure (CSB) for 2014/15 totalled £14.547 million, which was £763,000 (5%) above the original estimate and £223,000 (1.5%) above the revised. When compared to a gross expenditure budget of approximately £74 million, the variances were restated as 1% and 0.3% respectively.

There were also improvements in the funding position as this showed an increase of £152,000 when compared to the revised position. Although the Government were reimbursing councils general funds for section 31 income, which had been higher than budgeted, the Council’s share of the business rate income exceeded the baseline and a levy had become due to Central Government. There was also the requirement for the provision to cover future rating appeals which were estimated and based on the most up to date information available. The Councils portion of the Business Rates collection fund deficit at the end of March 2015 was some £419,000 which would need to be paid back over the next two years, thus adversely affecting the future funding available to the General fund.

The Continuing Services Budget expenditure was £763,000 above the original estimate and £223,000 higher than the revised. Variances had arisen on both the opening CSB and the in year figures. The opening CSB was £185,000 higher than the revised estimate and the in year figures, £38,000 higher than the revised estimate. Salaries were underpent by £109,000 and the  actual salary spending for the authority in total, including agency costs, was some £20.513 million compared against an original estimate of £20.622 million. All of the underspend fell on the General Fund and was within Neighbourhoods and Governance. The HRA salaries were marginally overspent and a vacancy allowance of 1.5% was included in the budget, reducing from 2.5% allowed for in the previous year in the event vacancies were around 2%. Therefore when compared to the Revised Estimate there was a General Fund underspend of around £103,000.

The main movement between the Original estimate and the Revised and Actual position was the creation of the spend and save reserve which had moved £500,000 from the General Fund Balance into an earmarked reserve, which had been set up to fund any initial costs required to achieve on-going CSB savings. This would be the first year of operation for the fund and it would operate in a similar way to the District Development Fund (DDF), in that there would be the ability to move budgetary provision between years as necessary. There was an additional amount added to the General Fund Bad & Doubtful debts provision as a number of uncollectable debts were written off including money relating to the old non-domestic rates regime.

The original in year CSB savings figure of £870,000 became an in year savings figure of £1,089,000. There were a number of items added during 2014/15 which included; savings on the refuse contract (£144,000), additional Development Control and Pre-Application income (£120,000), additional rents from shops (£73,000) and a reduction in external Audit fees (£35,000). The level of savings on the waste contract fell short by £81,000 and the other three items turned out broadly as expected. Offsetting this was lost income from the market at North Weald Airfield where a further £310,000 was removed from the ongoing budget. There was concern that despite the actions taken income would fall even further and the future use of the site will need to be reveiwed.

The Net DDF expenditure was expected to be £1,863,000 in the original estimate and £1,122,000 in the revised estimate but actually showed net expenditure of £249,000. This was £1,614,000 below the original and £873,000 below the revised. There were requests for carry forwards totalling £575,000, which mainly related to one-off projects that were akin to capital, in that there was regular slippage and carry forward of budgetary provision which created a net underspend of £298,000.

The DDF reduced between the Original and Revised position by some £741,000, which was mainly due to new items identified during 2014/15, such as additonal housing Benefit overpayments and Council tax Benefit adjustments and grants (£326,000), additional Development Control income (£120,000), Income from shops (£78,000), slippage on the local plan budget (£91,000) and Building Maintenance (£46,000).There were a number of items contributing to the underspend of £873,000, such as additional Development Control income over and above that allowed for previously (£103,000), A further receipt relating to the Heritable investment (£100,000), Slippage relating to Building Maintenance (£123,000), Asset rationalisation (£101,000), The transformation Programme (£75,000) and NEPP redundancies (£31,000). This resulted in the overall position on the DDF balance on 31 March 2015 being just below £3.6 million.

A Deficit within the Housing Revenue Account of £807,000 and £987,000 was expected within its Original and Revised revenue budgets respectively, the actual outturn were a deficit of £397,000. There were savings on Revenue Expenditure of £488,000 when compared to the revised position and these included reduced energy charges (£61,000), a lower addition to the provision for bad & doubtful debts (£67,000) and a reduction in rents rates and taxes (£43,000). There was also substantial slippage on the enhancement fund with the balance now being £179,000. Income from Dwelling and non-dwelling rents were down by £46,000 and other charges by £47,000. The depreciation charge relating to HRA assets was £461,000 higher than expected, although the underspend showing on the row ‘transfer from major repairs reserve’ was related to this, so only the difference between the two of £192,000 affected the bottom line of the HRA. There was an underspend on the programme last year and therefore £67,000 was requested for carry forward into 2015/16.

The Committee felt that a three year time limit should be considered for carry forwards due to a number of historic approvals and the continuous carrying forward of the funds. Councillor Whitbread stated that perhaps officers should have to resubmit details on why they require funding and whether it was still relevant. The Committee concluded that Cabinet Members should investigate the carried forwards within their Portfolio budget areas.

Decision:

(1)          That the provisional 2014/15 revenue out-turn for the General Fund and Housing Revenue Account (HRA) be noted;

(2)          That as detailed in Appendix D, the carry forward of £575,000 District Development Fund expenditure be noted ; and

(3)          That the carry forward of £67,000 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.