Agenda item

This report sets out the projected 2006/07 outturn position on the General Fund Revenue Account, the Housing Revenue Account (HRA), the Collection Fund and the Public Sector Agreements (PSAs) for 2006/07.  In line with this information it asks the Executive to consider requests for underspent project budgets to be carried forward and resultant transfers to reserves.

RESOLVED:             (i)            That the provisional outturn position be noted;

(ii)               That the requests to carry forward funds into 2007/08, totalling £1,519k for General Fund services, detailed in Annex 4 and summarised in paragraph 55 of the report, be approved;

(iii)             That the supplementary estimate in 2006/07 of £135k in relation to the changes in accounting treatment of the costs of capital disposals be agreed, as highlighted in paragraph 36 of the report;

(iv)              That the supplementary estimates in the 2007/08 budget for the Chief Executive’s department for £123k and Neighbourhood Services for £100k be agreed;

(v)                That the request to carry forward £39.3k for the housing revenue account, as detailed in Annex 4 and summarised in paragraph 58 of the report, be approved;

(vi)              That the increase in the Neighbourhood Services Trading Account Reserve by £139k to £439k be approved;

(vii)            That the transfer of the remaining underspend to revenue reserves be approved;

(viii)          That the enhanced priority placed by the Director of Resources on the need to address the issues identified as part of future monitoring rounds be noted;

(ix)That, as detailed in paragraph 79 of the report, the commitment of the Executive to funding the additional resources up to £155m required to make the Waste Private Finance Initiative (PFI) project affordable over the life of the contract be reaffirmed.

REASON:To enable the Executive to set a revised budget in 2007/08 and monitor it effectively.

Members received a report which set out the projected 2006/07 outturn position on the General Fund Revenue Account, the Housing Revenue Account (HRA), the Collection Fund and the Public Sector Agreements (PSAs) for 2006/07.  In line with this information it asked them to consider requests for underspent project budgets to be carried forward and resultant transfers to reserves.

It was reported that all general fund portfolio areas except Children’s Services had managed to outturn within their budget level of funding and that even in that instance the net overspend for Learning, Culture & Children’s Services’ (LCCS) General Fund services was just £12k.  Overall these areas had combined to provide an underspend of £2.44m.  In addition corporate budget areas had also contributed a £1.37m underspend providing an overall underspend of £3.81m.

As a result of the action taken within directorates to manage the overspends identified in earlier monitoring reports there had been an improvement of £2.604m from the last monitor.  This would enable £2.290m to be transferred into the General Fund reserve.  The level of total reserves at 31 March 2007 incorporating these underspends but before allowing for agreed carry forwards was £9.637m.  After allowing for the use of balances already approved as part of the 2007/08 budget process (£1.312m), the carry forward requests (£1.519m), requests for supplementary estimates in 2007/08 (£223k), and assumed use of Neighbourhood Services trading account reserves (£0.109m), the available level of reserves at 31 March 2008 was forecast to reduce to £7.396m.  The minimum level of recommended reserves for 2006/07 was £4.95m (£5.2m in 2007/08).  

It was highlighted that while the overall reserves position and outturn had improved due to a number of one-off occurrences this masked the true financial position of the authority.  In overall terms the Council faced a number of on-going budget pressures and in future budget rounds would need to identify appropriate actions to control and mitigate them.  The use of reserves to plug such gaps was unsustainable as it merely offset problems to the future and could lead to a continuing deterioration in the Council’s underlying financial position.  The Council’s policy of only using one-off resources to meet one-off spending pressures was designed to explicitly negate such a risk.

The options available to the Executive related to the approval of individual carry-forward requests and supplementary estimates.

The Executive thanked all the Directorates who had outturned within their budget targets.

RESOLVED:             (i)            That the provisional outturn position be noted;

(ii)               That the requests to carry forward funds into 2007/08, totalling £1,519k for General Fund services, detailed in Annex 4 and summarised in paragraph 55 of the report, be approved;

(iii)             That the supplementary estimate in 2006/07 of £135k in relation to the changes in accounting treatment of the costs of capital disposals be agreed, as highlighted in paragraph 36 of the report;

(iv)              That the supplementary estimates in the 2007/08 budget for the Chief Executive’s department for £123k and Neighbourhood Services for £100k be agreed;

(v)                That the request to carry forward £39.3k for the housing revenue account, as detailed in Annex 4 and summarised in paragraph 58 of the report, be approved;

(vi)              That the increase in the Neighbourhood Services Trading Account Reserve by £139k to £439k be approved;

(vii)            That the transfer of the remaining underspend to revenue reserves be approved;

(viii)          That the enhanced priority placed by the Director of Resources on the need to address the issues identified as part of future monitoring rounds be noted;

(ix)That, as detailed in paragraph 79 of the report, the commitment of the Executive to funding the additional resources up to £155m required to make the Waste Private Finance Initiative (PFI) project affordable over the life of the contract be reaffirmed.

REASON:To enable the Executive to set a revised budget in 2007/08 and monitor it effectively.