Consideration was given to a report presented by Pete Hudson, Chief Finance Manager, which detailed how in 2013/14 the Council budgeted to spend £221.474m on its General Fund Revenue Account. Actual spending for the year was £220.440m, a saving against budget of -£1.034m (or -0.47%). Of this, £0.747m was accounted for by surpluses on trading accounts, leaving a net underspend of £0.287m. (-0.13%)
Requests to carry-forward £251k of unspent 2013/14 budgets for specific projects/purposes were also included in this report. This was approved by Cabinet leaving the remaining balance available to support the future years’ budget at £36k.
In addition, the Delegated Schools’ Budget was £154.271m. Actual spend against this was £155.155m, an overspend of £0.884m for the year. This had been drawn down from Schools’ Reserves which at 31st March, 2014 stood at £6.456m.
The Housing Revenue Account (HRA) in 2013/14 was budgeted to draw down funding from the HRA General Reserve of £2.599m. However, use of the reserve was not required and there had been a contribution to this Reserve of £1.570m.
This was a very positive outturn, especially given the challenges faced in-year which necessitated the implementation of a moratorium on all but essential spend from October. It was the result of the hard work of both Elected Members and staff in managing reducing levels of funding at a time of increasing service need, and also the generally good and responsible financial management on the part of budget holders.
Reflecting the above unaudited outturn position, the Council’s Revenue Reserves as at 31st March, 2014 were General Fund Reserves available and uncommitted to support the Budget £10.222m and Earmarked Reserves £57.031m of which £43.540m was ringfenced for HRA, Schools and to meet future PFI contractual obligations.
Discussion ensued and the following issues were raised and subsequently clarified:-
· The risks posed by academy conversions and the monitoring of these given that the deficit was borne by the Local Authority.
· The potential for the debts for academy conversions to increase and the impact this would have.
· Requests for carry forward of the underspends on Traded Services and whether this was planned to mitigate changes in the following year.
· Surplus on School Catering and whether the Free School Meals for pupils under seven years of age had been factored in.
· Mitigation of risks for those services that could be squeezed even further for savings.
· Definitions and explanations for services relating to non-essential spend and the analytical assessment tool to be explored by way of a small working group.
· Housing Revenue Account and the inclusion of this in the Select Commission’s work programme to further explore the thirty year business plan.
Resolved:- (1) That the Council’s unaudited General Fund, Schools’ and the Housing Revenue Account (HRA) Revenue Outturn Position Statements for 2013/2014 be noted.
(2) That the level of the Council’s Revenue Reserves as at 31st March, 2014 be noted.
(3) That Cabinet’s approval of the carry forward of underspends on Trading Services (£747,055) and requests for carrying forward of specific items (£251,467) in accordance with the Council’s approved policy be noted.
(4) That the request to Cabinet to waive the Council’s policy of carrying forward 20% of Directorate underspends from 2013/14 be noted.
(5) That consideration be given to sharing information on academy conversions at a future meeting of this Select Commission.
(6) That a small working group comprised of Councillors Ellis, Sansome and Watson explore further the criteria and analytical assessment process for non-essential spend.
(7) That the Housing Revenue Account be included for consideration as part of the Work Programme.