Agenda item

Revenue and Capital Outturn 2918/19

To consider the actual income and expenditure for 2018/19, budget variances, contributions to and from reserves and an update to the Capital Programme for carry forwards and other changes.


Councillor Andrew Jarvis, Finance and Resources Portfolio Holder, presented the Revenue and Capital Outturn 2018/19 report which set out the Council’s financial performance for 2018/19 and the impact on reserves.


The report had been considered by the Overview and Scrutiny Committee at its meeting on 12 July 2019 and by Cabinet on 17 July 2019.


Councillor Jarvis informed Members that following the meeting of Cabinet, an amendment to the financial figures had come to light.  Since the preparation of the accounts the Government had been denied leave to appeal two court cases on the treatment of public sector pensions.  Although the original court cases related to judges’ pensions and fire fighter pensions, there was a similar, but much smaller, impact on local government pensions.  Along with all other Councils, South Lakeland had had to request revised pension figures and had had to amend the accounts to increase the pension charge to the General Fund by £608,000 for past pension service dating back to 2012.  There was an equal and opposite adjustment in the General Fund, as councils did not have to balance their pension costs in a single year.  The balance sheet now showed an increased pension liability of £608,000.


Although the absolute outturn figures would change, there would be no net impact on the general fund balance, usable reserves or variances for 2018/19 or 2019/20.


There was, however, a potential increase in pension contributions from April 2020.  There was a pension revaluation currently being undertaken which would change the Council’s contribution rates from April 2020.  On the current assumptions, this could be in the region of £123,000.  This was a very rough figure, as there was a lot of work to be carried out now at the nation level to ensure the local government pension scheme was fully compliant with equalities legislation.


In moving the recommendations contained within the report, Councillor Jarvis thanked the Finance Team for their work and, in particular, for highlighting the challenges in the budgets for the remainder of the year, thereby enabling the Management Team to take the necessary corrective actions and deliver without deficit.  Councillor Peter Thornton seconded the proposals, commending the Council’s financial contributions to, for example, car parks, caravan sites, Mintworks and investment in arts bringing income to the area.  He raised that this was due to a series of decisions made over the last ten to 15 years.  He further referred to a number of non-statutory services carried out by the Council, welcoming this powerful report.


During discussion, Members commended the report, highlighting the Council’s contribution to the community through sound management of finances, such as the enabling of play areas and affordable homes and the support offered through locality budgets.


The Leader and Promoting South Lakeland Portfolio Holder took the opportunity to inform Members about “Inside Out”, a new community centre in Kendal for young children which would not have happened without the Council’s moral, administrative and financial support.  He emphasised that this, as well as the Council’s financial contribution to many other projects, was due to the fact that the Council was a financially sound organisation.


Councillor Jarvis and the Finance Lead Specialist (Section 151 Officer) responded to queries raised.  Councillor Jarvis undertook to provide a full written response with regard to the overspend on Development Control salaries and receipt of lower income in 2018/19.  With regard to the change in pension contributions, he acknowledged that there would certainly be a cost to the Council in relation to this long-term obligation and suggested that this important topic would merit a fuller briefing to Council.  The Finance Lead Specialist (Section 151 Officer), in relation to a question on outstanding debts, explained that all debt due to the Council was reviewed and that, where it was thought that debt may not be collected, provision was made for the potential write-off of relevant debt.  Account was taken of the type of debt, the age of the debt and whether any contribution had been made or if regular instalments were being made.  She undertook to provide a written response regarding how outstanding debts in relation to encroachments on Lake Windermere were viewed.


RESOLVED – That the following be approved:-


(1)        the contributions to and from reserves detailed in Appendix 1a to the report; and


(2)        the Capital Programme and funding set out in Appendices 3 and 4 to the report as part of the Council’s Budget and Policy Framework.

Supporting documents: