Agenda item

Report by the Head of Resources. 

The Committee considered a report by the Head of Resources (circulated previously) regarding the Statement of Accounts for 2018/19.

The Head of Resources highlighted the following points for the Committee:

·         The most important elements of the report were contained within the first 10 pages, which set out the challenges and reviews for the year 2018/19.

·         The purpose of the narrative report was to provide an easy to understand guide to the most significant financial matters reported in the accounts. This element of the report focussed on the year 2018/19 and beyond.

·         The Council originally budgeted to spend £12.220m in 2018-19. As at 31 December 2018, the Council was forecasting a net deficit of £0.019m against the budget.

·         The last quarter of the financial year had seen some favourable variances since the last reported position; additional income through the one-off pilot year for 100% Business Rate Retention scheme and additional savings achieved throughout our staffing budgets.

·         The final outturn position was a net budget surplus of (£0.754m),

which was an overall movement of (£0.773m) from the last forecast at quarter three.

·         The Collection Fund Reserve balance at 31^st March 2019 was £1.017m and was set aside to smooth the future year’s impacts on the budget from the Collection Fund balances. Following a contribution to the Collection Fund reserve of £0.236m in 2018/19, a residual surplus of £0.518m would remain in the 2019/20 year.

·         He outlined the following earmarked reserves as follows:

Ø  £0.050m into Strategic Contingency Reserve to fund projects coming through the Strategy and Resources Committee.

Ø  £0.075m into Improvement Reserve to fund future service delivery initiatives.

Ø  £0.100m into Digital Transformation Reserve to fund further system improvements to our ICT infrastructure.

Ø  £0.100m into Repairs Fund Reserve to fund additional enhancements to Council assets (on top of the already planned maintenance).

Ø  £0.193m into a number of smaller Earmarked Reserves to fund already identified specific projects in 2019/20 year.

·         The general fund reserve balance at 31^st March 2019 was £1.161m, which was a level of 9.5% of the Council’s net revenue budget.

·         He outlined the breakdown on the earmarked reserves, which were detailed on pages 68-69 of the report.

·         The Medium Term Financial Strategy (MTFS) monitored the changing financial situation of the Council over the future four financial years for 2019-20 to 2022-23 and was based on a number of assumptions. The major plans currently included within the MTFS to deliver the savings required in the short to medium term were outlined to the Committee. Plans for any future service changes would need to be factored in with the agreement of the Strategy and Resources Committee.

·         The Key Performance Indicators (KPIs) for 2017/18 and 2018/19 for each service were outlined on pages 26 to 29 of the report.

·         The core financial statements, which were detailed on pages 31 to 37 of the report.

In response to a number of questions, the Head of Corporate and Community Services and Head Resources advised the following:

·         In relation to the requirement for external borrowing of £1.2m when there was funding available within the internal reserves. The Head of Resources advised that the majority of borrowing was internally borrowed from within the internal cash reserves. He went on to explain the borrowing process in more detail, providing examples and explanation as to the management of cash flows. He added that there were a number of existing commitments to capital projects within the existing capital programme and with additional schemes committed for future projects there would be a requirement for further borrowing.

·         In relation to the reduction in the workforce of around 130 posts since the beginning of the 2010 spending review and whether there was a mechanism to review if there had been a detrimental impact from those vacancies. The Head of Resources advised that in 2010 prior to the spending review the Council had a workforce of around 500 staff. This number had reduced to around 400 employees in the intervening years but had been addressed through a managed process. He added that whilst there had undoubtedly been an impact, the Council was working to address any shortfall via the improvement of the business and its processes. He further added that in terms of the staffing levels required for the delivery the Council’s services, the authority was now at the an acceptable level of resources. The Head of Corporate and Community Services added that some services once delivered by the Council had now disappeared altogether and that certain skills and expertise required for a particular project would be sought from external provider, which was still more cost effective than having a particular service in house.

·         In relation to the natural wastage of staff and the inherent risks to the remaining employees; the Head of Resources explained that sickness of any frontline staff i.e. a refuse driver was addressed via agency staff to ensure the continued smooth running of the service. There was also a sickness review process in place, which included a return to work interview.  The Head of Corporate and Community Services added that there was a sickness management process together with a supporting mechanism in place to support staff.

RECOMMENDED that the draft Statement of Accounts for 2018/19 be approved.

The Committee congratulated the Head of Resources and his team for their hard work.