Agenda item

To consider a report setting out details in respect of the provisional outturn for the General Fund, Housing Revenue Account, School balances position, the financial and delivery aspects of the Investment Plan and the delivery of the Treasury Management Strategy for the financial year 2018/19.

Cabinet received a report which set out details of the provisional outturn for the General Fund, Housing Revenue Account, Schools finance, the financial and delivery aspects of the Investment Plan and the delivery of the Treasury Management Strategy for the financial year 2018/19.

Cabinet also received a presentation on the Investment Programme Board end of year report 2018/19, which outlined projects that had been completed, projects in progress and priorities for the 2019/20 Strategic Investment Plan.

The budget for 2018/19 had been approved by full Council at its meeting on 15 February 2018.  The net General Fund revenue budget had been set at £154.726 million including efficiency savings of £10.143 million. The monitoring report up to 31 January 2019 had projected pressure of £0.642 million and the final position was an underspend of £1.031 million. It was proposed that the balance be transferred to the Change Reserve.  After the final transfer, the General Fund Revenue Account showed spend on budget for 2018/19.

As part of the 2018/19 final accounts, amounts had been set aside as provision and reserves for known liabilities and uncertainties that still remained in future years.

The Housing Revenue Account had year-end balances of £7.304 million, which was £4.634 million better than budget.

School balances had decreased from £3.356 million to £1.599 million, these balances included a significant amount of committed funds and the permitted carry forward of grants for the remainder of the academic year

The final capital expenditure for the year was £69.359 million, with a recommendation to approve reprogramming of £8.484 million into 2019/20.

In terms of Treasury Management the Authority had acted in line with the agreed strategy that the security of the Authority’s resources was of greater importance than returns on investments.  The level of investments at 31 March 2019 was £12.300 million.  The level of borrowing (excluding PFI) was £450.146 million (down from 2017/18 level of £461.155 million) which was well within the capital financing requirement agreed as part of budget setting. This was primarily due to continued level of internal borrowing. 

The financial year had seen the Authority continue to manage its finances despite ongoing funding reductions and continuing cost pressures in respect of social care services.  Despite these challenges the proactive management of the General Fund budget throughout the year had led to a year-end surplus of £1.031 million.

Whilst statutorily the Authority’s budget and Accounts must be prepared by individual financial years, the pressures and opportunities that the Authority faced often extended across several accounting years.  Decisions taken in one year would be felt in subsequent periods.  One of the benefits of the Authority’s regular budget monitoring process was that issues could be identified early in the year and action taken to address them.  The outcomes of these actions could then inform both budget setting and final accounts preparation.  Budget setting, budget management and final accounts could therefore be seen as related parts of a continuous process of financial management by the Authority. 

Overall, 2018/19 had been typical of recent years in that several strategic concerns had overlaid the management of the approved budget.  The Council had been able to manage these issues through its forward planning process and by pro-active management of in-year issues.  Financially that management action had been underpinned by close management of spend, and by taking advantage of short term borrowing rates to achieve interest savings. However, because such strategic pressures were a feature of the current local authority environment there would always be an element of risk moving forward into each new financial year. The experience of 2018/19 once again reinforced the importance of forward planning, a strong balance sheet, close management of the core budget, a regular monitoring and reporting process and a flexible approach to managing the efficiency programme.

Cabinet considered the following decision options:

Option 1 - agree the recommendations as set out in Section 1.2 of the report. 

Option 2 - disagree with all or some of the individual recommendations set out in section 1.2 of the report.

The Elected Mayor thanked everyone for achieving the provisional outturn position and for the achievements made in delivering capital projects in 2018-19.

RESOLVED that (1) the provisional 2018/19 outturn for the General Fund, Schools Finance and Housing Revenue Account, together with a financial overview of the year, as set out in the report, be noted;

(2) the decisions made under the Reserves and Balances Policy be noted;

(3) the Authority’s Investment Plan spend during 2018/19 and the financing put in place be noted;

(4) reprogramming of £8.484 million within the Investment Plan be approved;

(5) the Council’s Treasury Management performance be noted; and

(6) the performance against the Capital and Treasury Management prudential indicators be noted.

(Reasons for decision: The proposals set out in section 1.2 of the report form part of the 2018/19 Final Accounts process. Reprogramming of the Investment Plan will ensure successful delivery of projects included within the Investment Plan).