Issue - meetings

Members considered a report on the proposals informed through the annual review of reserves process.

The report detailed the statutory requirements and the response of the Chief Finance Officer, whilst also containing the strategy detailing the purpose for which the Authority held reserves.

The Deputy Section 151 Officer also highlighted the following points:

·         The purpose of the General Fund working balance was to mitigate any in-year budget risks;

·         The annual review of reserves was undertaken prior to the Medium Term Financial Plan.  The balances at 31 March 2019 were:

o   General Fund working balance totalled £3.849m;

o   General Fund Earmarked Reserves totalled £15.834m;

o   Capital receipts total £3.361m;

o   Capital Grants unapplied £0.587m

·         The overall general fund reserves were in excess of £17 million, which was over and above one year’s net expenditure.  The expectation was to have in excess of £2 million in the working balance, which would be retained until the impact of the fairer funding review was understood.

Following this introduction, Members provided comment on the report and asked questions of officers.  Further information was provided:

·         The Chairman of the committee had asked the Secretary of State for a fairer funding deal for Councils;

·         The strategy for the Valuation Volatility Reserve (VVR) was to hold it at a minimum of 5% of the purchase price of properties that have been acquired.  However Minimum Revenue Provision (MRP) was monitored throughout the year to see what would have been charged.  The Authority had taken the approach of using the VVR rather than MRP for commercial properties as an alternative prudent approach and it was agreed with WLDC’s external auditors each year. 

The Deputy Section 151 Officer assured Members that the external auditors considered this approach was in accordance with the Local Government Act 2003, and was considered prudent;

·         Individual reserves were assessed based on risk.  The Authority would speak with insurers on its risk reserve.  Every reserve was looked at in terms of what would need to be issued in a replacement programme, whilst being mindful of the Corporate Plan objectives;

·         The authority had been spending on large projects such as the Crematorium, and the proposed cinema in Gainsborough.

RESOLVED to:

1)    Approve the changes as proposed and informed by the Earmarked Reserves review;

2)    Approve a net contribution from General Fund to Earmarked Reserves of £0.209 million.

Note:   Following the vote, Councillor Anne Welburn left the Chamber and did not return