Issue - meetings

Report of the Head of Finance (attached)

Purpose: to report the final year end position for revenue and capital expenditure against budget for the financial year 2012/13.

The committee is recommended to:

1.      note the overall outturn position of the council as well as the outturn of individual service areas.

2.      take into account the impact of the outturn position in the integrated service and financial planning process when setting the 2014/15 original budget.

3.      note the slippage in the capital programme to 2013/14.

The committee considered the report of the Head of Finance setting out the financial out-turn for revenue and capital spending for the financial year 2012/13.

Mr Simon Hewings, Accountancy Manager, Mr William Jacobs, Head of Finance, and Mr David Dodds, Cabinet Member for Finance, introduced the report and answered questions from the committee as follows:

·          Additional training for officers with budgetary responsibility about assumptions and forecasting in setting budgets was underway. This should help officers improve the forecasts used in setting the 2014/15 budget.

·          In some cases services set their budgets based on worst-case scenario, and a corporate contingency is also budgeted for.  It may not be necessary to set such a pessimistic budget.

·          Just under half of the variance was additional and unexpected income such as central government grants and increased income from fees and charges.

·          Underspends were transferred to reserves but are available to spend in future years.

·          Insurance premiums fluctuated as these were recalculated annually after a review of assets and claim history.

Mr John Backley, Technical and Facilities Manager, answered questions about car park charges and council facilities:

·          Income and expenditure on car parks was ring-fenced and income from car park charges was reinvested in maintenance, staff costs, and long-term upgrading.  While there was no intention to generate a surplus, it was permitted provided it was used for work on the car parks in the long term.

·          The £128,000 income shown was gross income, not profit.

·          Initiatives such as charge-free periods and reduced price season tickets increased use and this could increase overall income.

·          The income generated depended on the decisions taken by Cabinet when setting fees and on the overall use of the car parks;

·          A new four year supply contract started on 1 October 2012 had reduced the cost of electricity. Fewer staff in the building reduced electricity use.

Members of the committee commented that:

·          It was better to be looking at an underspend than an overspend.

·          Was the council charging its taxpayers too much, considering that there had been underspends in each of the last nine years, and could the Cabinet realistically recommend a much lower level of council tax in one year?

·          Training on budget setting was welcomed as it was not an easy task to set a prudent budget with correct contingencies.

The committee noted the report.