Issue - meetings

To consider the report of the Head of Treasury Services.

Scrutiny Committee – Resources considered the report at its meeting on 24 March 2010 and comments will be reported.

(Report circulated)

The report of the Head of Treasury Services was submitted, updating Members on the latest financial position in respect of the money deposited with the Icelandic banks and the implications that this has on the Council’s overall revenue budget.

The Head of Treasury Services informed Executive that the legal challenge regarding the refusal of the Winding-Up Board of Glitnir bank to grant preferential creditor status was continuing and the outcome was unlikely to be known for a further 12 months.  The Council was continuing to work with other interested parties to challenge the decision of Communities and Local Government not to allow capitalisation of potential losses.

Scrutiny Committee – Resources considered the report at its meeting of 24 March 2010 and the comments and support of Members were noted.

Councillor Martin attended the meeting and spoke on this item under Standing Order 44. He supported the measures proposed in the report to address the position.

Members endorsed the importance of maintaining the Council’s balances at a healthy level, particularly in view of the transition to Unitary status. They supported the measures proposed to address the position including the capitalisation of statutory redundancy payments.   They were pleased to note that a significant refund was likely to be received from HMRC in respect of VAT and that it was anticipated that further budget savings might be identified on the closure of accounts for last year. 

Noting the options available and for the reasons stated in the report, Executive recommended to Council that:-

(1)        the Council capitalises its statutory redundancy payments for 2009/10 and 2010/11; and

(2)        if a positive decision on capitalising the Icelandic impairment is not forthcoming then further measures to reduce the revenue budget outlined in the report be adopted.

The report of the Head of Treasury Services was submitted, updating Members on the latest financial position in respect of the money deposited with the Icelandic banks and the implications that this has on the Council’s overall revenue budget.

The Head of Treasury Services informed Executive that the legal challenge regarding the refusal of the Winding-Up Board of Glitnir bank to grant preferential creditor status was continuing and the outcome was unlikely to be known for a further 12 months.  The Council was continuing to work with other interested parties to challenge the decision of Communities and Local Government not to allow capitalisation of potential losses.

Scrutiny Committee – Resources considered the report at its meeting of 24 March 2010 and the comments and support of Members were noted.

Councillor Martin attended the meeting and spoke on this item under Standing Order 44. He supported the measures proposed in the report to address the position.

Members endorsed the importance of maintaining the Council’s balances at a healthy level, particularly in view of the transition to Unitary status. They supported the measures proposed to address the position including the capitalisation of statutory redundancy payments.   They were pleased to note that a significant refund was likely to be received from HMRC in respect of VAT and that it was anticipated that further budget savings might be identified on the closure of accounts for last year. 

RECOMMENDED to Council that:-

(1)        the Council capitalises its statutory redundancy payments for 2009/10 and 2010/11; and

(2)        if a positive decision on capitalising the Icelandic impairment is not forthcoming then further measures to reduce the revenue budget outlined in the report be adopted.

(Report circulated)

To consider the report of the Head of Treasury Services – report circulated

The Head of Treasury Services presented the reportto update Members on the latest financial position regarding the money deposited with the Icelandic banks and the implications that this had on the Council’s overall revenue budget. 

Members were updated on the position regarding the unsuccessful application to capitalise £1.832 million.  At the time the Council made the submission to the Communities and Local Government (CLG) the Council was and still remained satisfied that it met all the criteria laid down by CLG. The Council had not yet received any specific detail as to why it was unsuccessful with its submission.  The Council had been successful however in its request to capitalise statutory redundancy expenditure of £500,000. 

The Head of Treasury Services informed Members that the Council was continuing to work with other interested parties in seeking a review the of capitalisation decision from the CLG. In the short term, the Council could function with a low level of balances although, in the medium term, it would be necessary to identity further one-off savings of £1.832 million in order to restore balances to the prudent level that was required.

In response to a Member’s question, the Director Corporate Services stated that it was too early to confirm if the £1 million budget for the LGR would sufficiently cover the work needed for the transition to a Unitary Authority.

In answer to a Member, the Head of Treasury Services stated that the Council had reviewed its Investment Strategy in light of the Icelandic bank crisis which included advice from credit agencies. If the Council could capitalise the loss from the Icelandic banks it would mean that the cost could be spread over the next 25 years.

The Scrutiny Committee - Resources noted the report and recommended approval by the Executive that:-

(1)        the Council capitalises its statutory redundancy payments for 2009/10 and 2010/11; and

(2)        if a positive decision on capitalising the Icelandic impairment is not forthcoming then further measures to reduce the revenue budget outlined in the report be adopted.

(Report circulated)