Agenda item

To consider the report of the Chief Finance Officer.

The Chief Finance Officer presented the report for the Overview of General Fund Revenue Budget for the first quarter, which advised Members of the overall projected financial position of the General Fund Revenue Budgets for the 2019/20 financial year after three months. He highlighted that the reports had been split into the HRA and General Fund reports to make them more appropriate to provide information to Members and that the report also sought approval of additional expenditure for the financial year.

The Chief Finance Officer discussed the financial summary, which predicted that there would be an under spend of £120,500 against a revised budget of £19,966,520 and included the supplementary budgets of £1,394,660, which had been approved by Council in July 2019 for the first quarter. The General Fund budget was on track against the original budget projections. The projected year-end balance would be £3,822,992, which was above the £3 million minimum requirement set by Council in February 2019 and there were no significant issues to highlight in the report. 

He referred Members to the request for approval for a supplementary budget totalling £493,930, which would be added to the 2019/20 budget and would be financed from CIL, earmarked reserves and the General Fund working balance. He noted that there would be a reduction of £3,744,492 to the projected General Fund working balance as a result. It was explained that the term virement was used for the transfer of funds from one financial account to another and that any transfers of budgets above £40,000 or between Directors’ areas of responsibility would require Council approval.

The Chief Finance Officer explained that the Fair Funding and Business Rate reviews had been delayed by Central Government for a year and that as a result of the work already done, there was a likelihood of one off Funds being added to the General Fund reserves in next year’s budget.

In response to questions from Members, the Chief Finance Officer explained that

·         There would be savings made during the financial year from surplus income which would be transferred to the General Fund reserves to support savings required for 2020/21;

·         The term for ‘Capitalisation of Officer time’ was used when charging for a person’s time in respect of building assets.

·         There would be a likely impact to the net income from car parking, following the introduction of the Carbon Neutral City Policy, which was being considered by Senior Management as part of the ongoing project;

·         The net figure for the Financial Services team would show a saving for the first half of the year while using agency staff. There was a national issue for recruiting qualified accountants based on public sector salaries. Currently two roles had been successfully filled, but additional recruitment agencies were being considered and the option for market supplementing salaries was being addressed;

·         Debt write offs were legitimate debts that could not be collected and any error amounts would be cancelled. The total Council tax bill write offs would impact only 8% on Exeter City Council, however there were no Key Performance Indicators (KPI’s) to compare Exeter City Council against other authorities;

·         The reported debt for the Civic Ceremonials, related to the shop next to the Guildhall and the difficulty in finding suitable tenants to let the shop. The debt would likely be written off, but was considered to be a one off issue. The main issues affecting the Civic Ceremonials budget would be for filling roles in this department and costs of postage in elections. The layout and wording for this budget will amended by the finance team to clarify the budget issues;

·         Additional information on potential changes for the waterways budget would be provided to Members;

·         The areas of risk was a new section in the report which highlighted risks outside of the Council’s control and could impact on the budgets. The Planning Services Revenue budget figure related to issues with Planning which was a similar issue affecting the rest of Devon;

·         There were no other unaccounted General Fund or HRA funds, and they had been reported correctly;

·         The closure of the public conveniences had initially reduced the budget, but following the public conveniences consultation and the temporary re-opening of toilets, it had increased slightly over budget, but a confirmation of the budget increase would be provided to Members;

·         The Environment and City Management budget transferred in relation to Clifton Hill was the set aside for business rate costs for empty properties and demolition of Clifton Hill. These budgets would be transferred to Corporate Property;

·         The City Point redevelopment had been approved last year and the budget was located under the Corporate Property budget for Environment and City Management in the report;

·         The Chief Finance Officer would seek clarification from the Council Tax team and respond to Members regarding the level of prosecution for residents who did not pay Council Tax;

·         Data for the car parking revenue and the Thursday parking tariff impacts would be provided to Members;

·         The report explained the key variances in the budgets and did not cover all issues, however details on the cost for removing travellers and litter collection would be provided to Members;

·         A risk rating of each of the areas of budgetary risk would be added to future reports.

Councillor Hannaford moved and was seconded by Councillor Mitchell to add an additional recommendation that consideration be made in relation to paragraph 9.7, subject to consultation with Human Resources and the Trade Union; was voted for unanimously.

The Chair moved and was seconded by Councillor Hannaford to add the additional recommendation to remove the shop attached to the Guildhall from that budget to Corporate Property in relation to paragraph 9.5; was voted for unanimously.

The Corporate Services Scrutiny Committee noted the report and requested Executive and Council to note and approve:

(1)  The General Fund forecast financial position for the 2019/20 financial year;

(2)  The supplementary budgets of £493,930 and budget virements as detailed in paragraph 9.10;

(3)  The outstanding Sundry Debt position as at June 2019;

(4)  The creditors’ payments performance;

(5)  Consideration to be made in relation to paragraph 9.7, subject to consultation with Human Resources and the Trade Union; and

(6)  To remove the shop attached to the Guildhall from that budget to Corporate Property in relation to paragraph 9.5.