Agenda item

The Committee received the reports of the Chief Finance Officer which asked Members to consider and comment on the financial information that covered both Quarters 3 and 4 of 2019-20.

Quarter 3

Officers explained that at the end of Quarter 3, the General Fund (GF) was forecasting a breakeven position. There continued to be a shortfall on planned savings and shortfalls on key income streams but these had been mitigated by in year savings. The Housing Revenue Account (HRA) was indicating a higher surplus than at Quarter 2 of (£180k). This was due to continuing lower external borrowing requirements partially offset by lower savings expected in the current financial year from the implementation of the new housing system.

The Committee noted that GF savings were showing a forecast shortfall of £353k and the HRA a shortfall of £195k as a result of delayed projects, and some reprioritisation. The capital programme was forecasting an underspend of (£23.6m); (£16.9m) GF and (£6.7m) HRA. In the general fund, £11.6m related to slippage in the Housing Trust loans budget. Proposals for phase 2 of the Housing Development Programme were currently being developed and would be put forward to the Executive when finalised.

Members acknowledged that the recently approved acquisition of the waste collection fleet and wheelie bins had been added to the capital programme, but the £4m cost of the vehicles was now not expected to be incurred until the first half of next year; therefore it was recommended that the budget be rolled into 2020/21.

In the HRA a number of programmes had been delayed whilst contracts were being procured, resulting in significant slippage. Expectations were that spend on these committed programmes would be completed in 2020/21 along with the further works already planned for that year.

The Programme for Growth was progressing well with projects delivering over multiple years. It was expected that funds from the business rates pool, towards the costs of Tour De Yorkshire and UCI cycling races, would be received in Quarter 4.

Quarter 4

Officers then took Members through the Quarter 4 report and explained that after carry forward requests, the Council’s year end results for 2019/20 showed a deficit of £363k including proposed carry forwards on the General Fund against budget. There were a number of variances (positive and negative) which made up the deficit, including: a shortfall on planned savings, adverse variances across a number of income streams, partly offset by in year staffing savings, higher investment income and unused contingency.

Members noted that the Housing Revenue Account showed a surplus of (£315k), which was mainly driven by lower external borrowing requirements, unused contingency, increased investment income and lower costs on premises cost. This was partly offset by a shortfall in savings due to the delays in the implementation of the housing system and increased void costs to assist with faster turnaround times. The surplus would be transferred to the Major Repairs Reserve to help fund future capital expenditure.

It was acknowledged by Members that planned savings for the year fell short in both the Housing Revenue Account and General Fund. General Fund savings fell short by £374k due to delays in some initiatives whilst the Housing Revenue Account was £195k short.

The capital programme spend was under budget as a number of projects had experienced delays and some were due to deliver over multiple years. After assumed carry forwards, a saving of (£1,213k) has been achieved - (£92k) General Fund and (£1,121k) Housing Revenue Account. The General Fund saving related to ICT costs that were no longer required. In the Housing Revenue Account, the roofing project had been incorporated in the new HRA business plan and therefore this particular budget was no longer required.

The Committee were informed that Programme for Growth spend had totalled £1,902k in 2019/20, with a further £854k to be carried forward.

The impacts of Covid-19 had been limited in 2019/20, but looking ahead to 2020/21 there were a number of risks to income streams and additional costs which would need to be carefully managed. This was because the size and duration of these risks and the potential financial support from central government would become clearer. A revised budget was planned for September 2020.

In response to a query about the shortfall in property income, Officers explained that some Council-owned industrial units were empty and required upgrading, and that there had been a drop in income from room bookings at the Civic Centre.

Members emphasised the importance of improving the industrial units so that they could be rented out and start to generate income. It was agreed that this had been an ongoing issue for some time, and as such Officers were asked to report back to the Committee on the matter in the future, and ensure that action was taken on the matter soon.

RESOLVED:

i.             To note the Council’s financial results and budget exceptions from Quarters 3 and 4 in 2019-20.

ii.            To ask Officers to report back to the Committee on the upgrading and letting out of Council-owned industrial units, as this had been an ongoing concern for some time.