Report by the Director of Resources and Deputy Chief Executive to the Strategy and Resources Committee on 3 July 2023 (attached).

Council considered the Performance and Financial Management Quarter 4 report to the Strategy and Resources Committee on 3^rd July 2023 (circulated previously).

(a)      Report of the PolicyDevelopment Committee

Councillor L. Spear, Chair of the Policy Development Committee presented the Committee’s report on the Performance and Financial Management Quarter 4 of 2022/23 report to the Policy Development Committee on 6^th July 2023 (circulated previously).

(b)    Report of the meeting of the Strategy and Resources   

        Committee

        Councillor Roome, Chair of the Strategy and Resources

        Committee reported the recommendations of the Strategy  

        and Resources Committee held on 3^rd July 2023 on the

        Performance and Financial Management Quarter 4 of

        2022/23 report (circulated previously).

Councillor Prowse added that he was really pleased with the second half of the report and in particular the recent opening of the Watersport Centre at Ilfracombe and the fantastic work of the team to bring it to fruition.

He had recently emailed the Property Manager to pass on his appreciation to the team. He also expressed his thanks to officers within the Local Plans teams for their hard work and contribution to a recent planning appeal. 

                             It was moved by Councillor Denton and seconded by

Councillor Worden “that minute 16 (f) of the report of the Strategy and Resources Committee held on 3^rd July 2023 regarding the Performance and Financial Management Quarter 4 of 2022/23 report be adopted”.

RESOLVED, that minute 16 (f) of the report of the Strategy and Resources Committee held on 3^rd July 2023 regarding the Performance and Financial Management Quarter 4 of 2022/23 report be adopted.

Councillor Wilikinson left the meeting.

Report by the Director of Resources and Deputy Chief Executive to Strategy and Resources on 3rd July 2023 (attached), and

(a) Minute Extract of Strategy and Resources on 3^rd July 2023 (to follow).

The Committee considered a report by the Director of Resources and Deputy Chief Executive (circulated previously) regarding the Performance and Financial Management for Quarter 4 of 2022/23 together with Minute Extract of Strategy and Resources on 3^rd July 2023 (circulated previously).

The Finance Manager highlighted the following:

·         The revenue budget for 2022/23 was approved at Council on 23rd February 2022 at £13,721,640.

·         As at 31st March 2023, it was pleasing to report that the final out turn position was a budget surplus of £693,000, which was an overall movement of £674,000 from the last forecast at Q3. The breakdown showing these movements are shown Appendix A – “Variations in the Revenue Budget”.

·         The movement from Quarter 3 of £674,000 can be mainly attributed to adverse and favourable variances as outlined in paragraph 4.1.4 of the report.

·         The cost of living pressures with double digit inflation continuing for the whole of 2022/23, peaking at 14.2% in Oct 2022 and still near that peak at the end of the March 2023 at 13.5%, resulted in the Council utilising fully the £936,000 budget management reserve in 2022/23. Due to the favourable variances and a transfer in year from the Collection fund reserve the Council has replenished this reserve to a balance of £815,000 to provide the resilience to similar inflationary pressures during 2023/24.

·         Members approved in June 2021 to proceed with the acquisition of Green Lanes Shopping Centre; which the Council completed the purchase in November 2021. The purchase of Green Lanes Shopping Centre was a once in a lifetime opportunity to acquire this strategic asset and complement other significant regeneration improvements being delivered within the Barnstaple town centre through the Future High Streets project. The financial modelling demonstrated that revenue income generated from the centre would cover both the repayment of the loan and asset management costs and would return a contribution to the Council which could be used towards mitigating future risks on income volatility, investment back into the centre and the overarching council budget.

·         From the revenue budget surplus of £693,000, it was proposed to set aside the amount into the following earmarked reserves:

Ø  Office Technology £120,000 – to fund capital business case.

Ø  Repairs Fund £214,000 – to fund capital business cases.

Ø  Budget Management £279,000 – mitigate 2023/24 inflationary pressures

Ø  Insurance Reserve £80,000 – mitigate 2023/24 higher insurance costs.

·         At the 31st March 2023 total external borrowing was £3,000,000. The timing of any future borrowing was dependent on how the authority managed its treasury activity and due to previously unprecedented low interest rates and reduced returns on investments it was prudent for the Council to ‘internally borrow’ and use these monies to fund the Capital Programme. This had resulted in a £275,000 reduction in loan interest payments and an increase in interest receivable of £266,000 in 2022/23. £275,000 had been placed into a new Treasury Management reserve to mitigate against higher interest rates as the Council moved into the 2023/24 financial year.

·         Appendix B detailed  ...  view the full minutes text for item 6

Report by Director of Resources and Deputy Chief Executive (attached)

The Committee considered a report by the Director of Resources and Deputy Chief Executive (circulated previously) regarding Performance and Financial Management Quarter 4 of 2022/23.

The Finance Manager highlighted the following:

·       The revenue budget for 2022/23 was approved at Council on 23rd February 2022 at £13,721,640.

·       As at 31 March 2023, it was pleasing to report that the final out turn position was a budget surplus of £693,000, which was an overall movement of £674,000 from the last forecast at Quarter 3. The breakdown showing these movements were shown Appendix A – “Variations in the Revenue Budget”.

·       The movement from Quarter 3 of £674,000 can be mainly attributed to adverse and favourable variances as outlined in paragraph 4.1.4 of the report.

·       The cost of living pressures with double digit inflation continuing for the whole of 2022/23, peaking at 14.2% in October 2022 and still near that peak at the end of the March 2023 at 13.5%, resulted in the Council utilising fully the £936,000 budget management reserve in 2022/23. Due to the favourable variances and a transfer in year from the Collection fund reserve the reserve had been replenished to a balance of £815,000 to provide resilience to similar inflationary pressures during 2023/24.

·       Members approved in June 2021 to proceed with the acquisition of Green Lanes Shopping Centre; which the Council completed the purchase in November 2021. The purchase of Green Lanes Shopping Centre was a once in a lifetime opportunity to acquire this strategic asset and complement other significant regeneration improvements being delivered within the Barnstaple town centre through the Future High Streets project. The financial modelling demonstrated that revenue income generated from the centre would cover both the repayment of the loan and asset management costs and would return a contribution to the Council which could be used towards mitigating future risks on income volatility, investment back into the centre and the overarching council budget.

·       From the revenue budget surplus of £693,000, it was proposed to set aside the amount into the following earmarked reserves:

Office Technology £120,000 – to fund capital business case

Repairs Fund £214,000 – to fund capital business cases

Budget Management £279,000 – mitigate 2023/24 inflationary pressures

Insurance Reserve £80,000 – mitigate 2023/24 higher insurance costs

·        At the 31 March 2023 total external borrowing was £3,000,000. The timing of any future borrowing was dependent on how the authority managed its treasury activity and due to previously unprecedented low interest rates and reduced returns on investments it was prudent for the Council to ‘internally borrow’ and use these monies to fund the Capital Programme. This had resulted in a £275,000 reduction in loan interest payments and an increase in interest receivable of £266,000 in 2022/23. £275,000 has been placed into a new Treasury Management reserve to mitigate against higher interest rates as we move into the 2023/24 financial year.

·        Appendix B detailed the “Movement in reserves and Balances” to and from earmarked reserves in 2022/23.

·        Appendix C detailed the “Strategic Contingency Reserve movements and commitments”.  ...  view the full minutes text for item 16