Decision Maker: Cabinet
Decision status: For Determination
Is Key decision?: No
Is subject to call in?: Yes
The Finance Portfolio Holder presented the third quarter financial monitoring report of 2018/19. The report provided an update on how the financial situation was progressing during this year. In part, it was backward looking, highlighting the Council’s expenditure and income during the first nine months of the financial year, but also including the Council’s current projections of expenditure during the rest of the year.
The Portfolio Holder provided details relating to the revenue budget, capital expenditure, collection of Council Tax and business rates and the Council’s current position with regard to debt collection, details of which were contained within the report and appendices.
Appendix 1 set out the revenue variances to date. Overall, at the end of Quarter 3, budget monitoring had identified a forecast year-end underspend of £260,000. In addition, there were projected to be £273,000 of carry-forward requests. Trends identified in these budget monitoring results had been fed into the 2019/20 budget setting process.
Appendix 2 set out the position on the Capital Programme. The capital budget at Quarter 2 2018/19 had stood at £9.795m. Carry-forwards to 2019/20 of £1.557m relating to the ERDF Flood Alleviation scheme and £300,000 relating to the Cross-a-Moor junction and an increase to the Millerground Play scheme of £12,000 due to additional funding had been approved by Council on 18 December 2018 as part of the updated Capital Programme submitted with the 2019/20 Draft Budget. This resulted in a 2018/19 Capital Programme of £7.950m at the end of Quarter 3. Expenditure against this Programme to the end of Quarter 3 had been £3.205m. There was anticipated to be significant expenditure during Quarter 4 and £0.458m of further re-profiling had been identified. A revised Programme was presented as part of the budget process, including any new schemes prioritised against the available funding.
Appendix 3 provided an update on Treasury Management for the quarter. There was one issue to report in terms of compliance with the approved Treasury Management Strategy relating to counterparty limits which had arisen as a result of an administrative error, as detailed within the report. Investments had performed better than the relevant benchmarks except in relation to long-term core investments due to the change in interest rates. No repayment of existing borrowing or new borrowing was anticipated up to the end of the financial year.
As part of the 2018/19 Budget Setting process, Council had agreed the removal of budgets in relation to the Social Lettings scheme, as Government had announced an end to the initiative. Subsequently, a reversal of Government policy had led to the Council continuing to provide this service. No budgets existed for this service, but the Council continued to incur expenditure and receive income in the form of Housing Benefit to cover the costs of lettings. It was, therefore, necessary to establish interim budgets for the remainder of 2018/19 to ensure proper authority to incur expenditure was in place. Therefore Cabinet was being asked to request that Council approve the creation of a £140,000 expenditure budget for the Social Lettings scheme, along with a corresponding £140,000 income budget for only the 2018/19 financial year, with a commitment from management to review service provision in future years.
Both the Portfolio Holder and the Leader and Promoting South Lakeland Portfolio Holder thanked officers for their work in highlighting the challenges in the budgets and allowing the Management Team to take corrective action.
RESOLVED – That
(1) the contents of the report be noted; and
(2) Council be requested to approve the budget changes to increase the income and expenditure budgets by £140,000, as outlined in paragraph 3.5.1 to the report and outlined above.
Reasons for Decision
Regular budget monitoring forms part of the corporate governance arrangements that support all Council priorities.
Alternative Options Considered and Rejected
There are no alternative options.
Report author: Lee Hurst
Publication date: 08/02/2019
Date of decision: 06/02/2019
Decided at meeting: 06/02/2019 - Cabinet
Effective from: 18/02/2019