Report by the Director of Resources and Deputy Chief Executive to the Strategy and Resources Committee on 1 July 2024 (attached).

Council considered a report by the Director of Resources and Deputy Chief Executive regarding the Performance and Financial Management Quarter 4 report of 2023/24 to the Strategy and Resources Committee on 1 July 2024 (circulated previously).

Report by the Director of Resources and Deputy Chief Executive to Strategy and Resources on 1^st July 2024 (to follow).

(a) Minute Extract of Strategy and Resources on 1^st July 2024 (attached).

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 2023/24 together with Minute Extract of Strategy and Resources on 1^st July 2024 (circulated separately).

The Finance Manager highlighted the following:

·       The revenue budget for 2023/24 was approved at Council on 22nd February 2023 at £14,766,450.

·       As at 31st March 2024, it was pleasing to report that the final out turn position was a budget surplus of £630,000, which was an overall movement of £557,000 from the last forecast at quarter 3.

·       The breakdown showing these movements was shown in “Appendix A – Variations in the Revenue Budget” was detailed on pages 59-60 of the report.

·       The net movement from quarter 3 of £557,000 could be mainly attributed to:

Adverse variances:

Ø  £89,000 Reduction in Parking Charge Notice income.

Ø  £191,000 Premises Electricity.

Ø  £132,000 Planning fee income.

Ø  £81,000 External Audit fee.

Ø  £70,000 Insurance premiums.

Ø  £75,000 Transfer of Public Conveniences.

Favourable variances:

Ø  £66,000 Work and Recycling Transport.

Ø  £54,000 Temporary Accommodation costs.

Ø  £46,000 Building Control Partnership.

Ø  £41,000 Crematorium income.

Ø  £57,000 Additional Grant income.

Ø  £91,000 Interest receivable and payable.

Ø  £760,000 Business Rates income.

Ø  £52,000 Contribution from Community Housing reserve.

·       A detailed breakdown of variations in the revenue budget could be seen on pages 59 and 60 of the report.

·       From the revenue budget surplus of £630,000, it was proposed to set aside the amount into the following earmarked reserves:

Ø  Corporate Property income volatility reserve - £150,000.

Ø  Insurance Reserve - £280,000 – mitigate 2024/25 higher insurance costs.

Ø  Digital Transformation Financial system reserve - £200,000.

·       The financial outturn for the Green Lanes Shopping Centre produced a net return (income less costs) for:

Ø  2021/22 year of (£243,600) due to minimal borrowing costs as these commenced in 2022/23.

Ø  2022/23 trading position produced a net return of (£291,000), including borrowing costs.

Ø  2023/24 trading position produced a net return of (£237,000), this included £150,000 from the income volatility reserve due to the financial impact of losing Wilko in August 2023. This reserve having been created in 2021/22 for this purpose to protect the council in the event of a tenant loss and smooth the budgetary impact.

·       As at 31st March 2024 the Collection Fund reserve balance held was £1,790,180. This earmarked reserve was created to deal with the timing impacts of the Collection Fund (Business Rates), which ensured the revenue budget was not unduly affected in the year the taxes were collected. Collection Fund deficits/surpluses were reversed out to bring the revenue account back to the budgeted figure for the year; the deficits/surpluses were recovered/distributed in the following financial years. This reserve included a £1,246,078 balance that would be utilised in 2024/25 and 2025/26 to mitigate timing differences of business rate reliefs awarded in 2023/24 that from an accounting perspective impact over the next two financial years; thus leaving the fund reserve with a  ...  view the full minutes text for item 22

Report by Finance Manager (attached)

The Committee considered a report by the Director of Resources and Deputy Chief Executive (circulated previously) regarding Performance and Financial Management Q4 203-24.

The Finance Manager highlighted the following:

Revenue

·         The revenue budget for 2023/24 was approved at Council on 22 February 2023 at £14,766,450.

·         As at 31 March 2024, it was pleasing to report that the final out turn position was a budget surplus of £630,000, which was an overall movement of £557,000 from the last forecast at quarter 3. The breakdown showing these movements were shown in “Appendix A – Variations in the Revenue Budget” of the report.

·         The last quarter of the financial year had seen a number of variances since the last reported position; most notably, reduction in both Planning fee income, Parking Charge Notice income and additional electricity costs throughout our assets; these had been offset by additional income, interest receivable, less interest payable on borrowing and additional Business Rates income.

·         The net movement from quarter 3 of £557,000 can be mainly attributed to:

Adverse variances: 

Ø  £89,000 Reduction in Parking Charge Notice income

Ø  £191,000 Premises Electricity

Ø  £132,000 Planning fee income

Ø  £81,000 External Audit fee

Ø  £70,000 Insurance premiums

Ø  £75,000 Transfer of Public Conveniences

Favourable variances:

Ø  £66,000 Work and Recycling Transport

Ø  £54,000 Temporary Accommodation costs

Ø  £46,000 Building Control Partnership

Ø  £41,000 Crematorium income

Ø  £57,000 Additional Grant income

Ø  £91,000 Interest receivable and payable

Ø  £760,000 Business Rates income

Ø  £52,000 Contribution from Community Housing reserve.

·         A detailed breakdown of variations in the revenue budget could be seen on pages 37 and 38 of the report.

·         The original budget for 2023/24 included a forecast to achieve £250,000 worth of salary vacancy savings. As at 31 March 2024, £332,000 had actually been achieved.

·         The National pay award negotiations for 2023/24 had been settled and was paid to staff in November 2023 salary, backdated to 1 April 2023. The pay award worked out to be an average of 6.7%, the original budget included 4%, and the additional costs of £436,000 had been funded from the Budget Management reserve.

·         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.

·         The financial outturn for the Centre produced a net return (income less costs) for:

Ø  2021/22 year of (£243,600) due to minimal borrowing costs as these commenced in 2022/23.

Ø  2022/23 trading position produced a net return  ...  view the full minutes text for item 22