Consideration was given to a report of the Director of Finance which provided the Cabinet with an update on the Council’s 2019/20 forecast revenue budget position and the financial position of the capital programme as at 30th June 2019 (Quarter 1) together with the revised capital programme 2019/23.
In relation to the Revenue position, the Cabinet was informed that the current forecast outturn position for 2019/20 was a projected deficit variance of £3.805m, after allowing for approved and pending transfers to and from reserves.
Members noted the most significant areas of concern were the People and Place, Children’s Services and Community Services & Adult Social Care portfolios. Action was being taken and would continue for the remainder of the financial year to address variances and take mitigating action as detailed in the report.
The overall corporate position was, to a limited extent, being managed by offsetting favourable variances, most noticeably from Capital, Treasury and Corporate Accounting budgets. An update on the major issues driving the projections was provided.
The report reflected the financial position at Quarter 1 and could be regarded as an early warning of the potential year end position if no corrective action was taken. The Cabinet noted that management action had been initiated across all service areas to review and challenge planned expenditure and to maximise income. Although, this action had not yet been fully implemented, it was anticipated that, by the year end, the outturn would be closer to a balanced position and this should start to be demonstrated in the Quarter 2 report which would be presented to Cabinet in December.
Information on the Quarter 1 position of the Dedicated Schools Grant (DSG), Housing Revenue Account (HRA) and Collection Fund was also outlined in the report. There were currently no significant issues of concern in relation to the HRA, however the Collection Fund was forecasting an in-year deficit of £0.480m. The DSG continued to be an area which was facing a financial challenge, with a projected deficit increase in 2019/20. Action was being
taken with the aim of reducing the cumulative deficit and bringing the DSG towards a balanced position.
In relation to the Capital position, the Cabinet was informed of the most up to date capital spending position for 2019/24 for approved schemes. The revised capital programme budget was £77.143m at the close of Quarter 1, a net decrease of £10.346m from the original budget of £84.332m. Actual expenditure to 30th June 2019 was £6.297m (8.16% of the forecast outturn). It was probable that the forecast position would continue to change before the year end with additional re-profiling into future years.
Options/Alternatives considered:
1. Approve the forecast revenue and capital positions presented in the report, including proposed changes.
2. Approve some of the forecasts and changes included in the report.
3. Not to approve any of the forecasts and changes included in the report.
RESOLVED that:
1. The forecast revenue outturn for 2019/20 at Quarter 1 being a £3.805m overspend be approved.
2. The forecast positions for both the HRA and Collection Fund be approved.
3. The use of reserves as detailed in Appendix 1 to Annex 1 of the report be approved.
4. The revised capital programme for 2019/20 to 2023/24 as at Quarter 1 be approved.