Agenda item

This report shows the expected financial position over the three year medium term based on the Council’s actual financial performance at the end of quarter two (30 September 2023) set against the latest budget.

Recommendation:

That the revenue budget virements as set out in appendices 1 to 3 be approved and incorporated into the three-year medium-term financial plan.

That the revenue budget supplementary estimates as set out in appendices 1 to 3 be approved and incorporated into the three-year medium-term financial plan.

That the revenue variances to be managed as set out in appendices 1 to 3 be noted.

That the capital variances as set out in appendices 1 to 3 be approved and incorporated into the three-year medium-term financial plan.

The Committee considered a report by the Director of Finance setting out the expected financial position over the Three-Year Medium-Term based on the Council’s actual financial performance at the end of Quarter 2 (30 September 2023) set against the latest budget.

Councillor Keith Martin introduced the report and Alison Scott, Head of Finance, made a few observations on the report.

In the subsequent discussion, the following points were made.

a)    Regarding the Revenue Reserve Position and proposals to maintain a minimum General Fund balance of £2 million, it was noted that the £2 million referred to in Paragraph 3.2.2 of the report comprised the General Reserve Fund and the Economic Impact Reserve (Paragraph 3.2.3) and were available for general use.

Work on budget preparation had started, including proposals to bridge any gaps in the budget.

b)    In response to a number of questions, the Director of Finance noted that –

·       Regarding VAT, partial exemption allowed local authorities, within prescribed limits, to claim back VAT;

·       The key risk in relation to Business Rates concerned revaluation, notably the significant increase in valuation of Warner Brothers. Government had reset the Business Rate system based on a 3% Appeals allowance across the board. Therefore, if Warner Brothers appealed, that would exceed the appeals allowance. Therefore, officers were in discussion with government on how to allow for this at the end of the year.

·       The Council’s external auditors would bring a final report to the December meeting of the Audit Committee on the 2019/20 accounts, followed, shortly thereafter, by a report on the 2020/21 accounts.

c)    Referring to the Table: 2023/24 Revenue Account – General Fund Summary, at Paragraph 1.3.3 of the report, and the supplementary estimates and variances saving of £327,000, and the £489,000 variation to latest budget overspend, it was noted that most of the £489,000 came from recyclable income referred to in Paragraph 3.5.1.

d)    Regarding Appendix 3, Annex A: P&R Committee Medium-Term Revenue Budget Service, and the officer comment –

“Variance to be managed in year of £60,000 due to backdated rent and interest from Telefonica.”

the Director of Finance stated that she would need to get further information before she could respond to questions about this item.

e)    Based on previous years, it was anticipated there would be an increase in recyclable income towards the end of the year, but this was dependent upon price fluctuations in the global commodities market.

As there were no more questions, the Chair proposed that the Committee consider the recommendations as set out in the report.

Councillor Martin, seconded by the Chair, moved that the Committee approve the recommendations, as set out in the report. In the subsequent show of hands, the votes cast were, as follows –

For the Motion:        10

Against:                    0

Abstentions:              2

RESOLVED: That that the Committee recommend to Council:

That –

1.    The Revenue Budget Virements, as set out in Appendices 1 to 3, be approved and incorporated into the Three-Year Medium-Term Financial Plan.

2.    That the Revenue Budget Supplementary Estimates, as set out in Appendices 1 to 3, be approved and incorporated into the Three-Year Medium Term Financial Plan.

3.    That the Revenue Variances to be managed as set out in Appendices 1 to 3 be noted.

4.    That the Capital Variances, as set out in Appendices 1 to 3, be approved and incorporated into the Three-Year Medium-Term Financial Plan.