Agenda item

Minutes:

The Committee heard from the Business Support Team Leader regarding the Budget and Treasury Monitoring report for period four of the 2020/2021 financial year. She explained that the report provided an oversight of financial performance for the areas of revenue, capital and treasury management. She explained that the report had been completed before the accounts closed and that the final report would be presented to the Committee in June. She detailed the following oversights per area.

 

Revenue

 

·         Revised Budget 2020/2021 report on 5 November 2020 approved a net movement to General Fund Balances of £0.783m. Forecast movements against the revised budget were:

 

·         ‘Business as Usual’ Revenue Forecast Out-Turn (after carry forwards) - Surplus £0.54m. However, a further £0.157m of carry forwards had been approved by the Management Team from the overall surplus position (as detailed at Appendix 2), therefore, £0.383m would be the contribution to the General Fund Working Balance (2.06% of Net Revenue Budget – see 2.1 for details of significant variances).

 

·         Forecast pressure above Covid-19 LA Support Grants £0.222m. This was a reduction of £0.226m against the pressure forecast for the revised budget at the midyear point (see 2.2.6 for details). Within this figure, there was £0.461m of unallocated LA Covid Support Grant (£1.496m received during 2020/2021). This balance was to be held within the Covid reserve to support ongoing costs of the pandemic.

 

·         Carry forwards approved during the year of £1.033m (see Appendix 2 for details). This was in addition to the £0.326m approved at the mid-year review. Total carry forwards for the year £1.359m.

 

·         Remaining net surplus of £1.643m (including carry forwards) to be transferred to the General Fund Balance, in addition to the £0.783m movement approved for the Revised Budget 2020/2021 – a total of £2.426m. This would result in a forecast Fund balance as at 31 March 2021 of £6.523m.

 

Capital

 

·         Capital Forecast Out-Turn: £8.653m, a variance of £5.46m against current budget £14.113m, this was made up of:

 

·         Anticipated Slippage of £5.442m (see section 3.1.2)

 

·         Bring forward from 21/22 budget of £0.104m in relation to Private Sector Renewal and Disabled Facilities Grant (see section 3.1.2)

 

·         Underspend of £0.011m on two schemes (see section 3.1.2):

o   Vehicle Replacement Programme £0.010m

o   Capital Enhancements to Council Owned Assets £0.001m

 

·         Overspend on two schemes of £0.007m (see section 3.1.2)

o   Flooding resilience £0.005m

o   Leisure facilities-Market Rasen £0.002m

 

·         Schemes that had now closed £0.0194m (Telephony)

 

·         Approval was also sought to transfer £0.0146m from Trinity Arts Centre capital scheme to the revenue budget and a request was made for £0.020m of funding to be made available from reserves for the contribution to Richmond House Conservatory.

 

Treasury Management

 

·         Treasury Management Report and monitoring:

 

·         Average investment interest rate for Jan to March was 0.763%

 

·         Total Estimated Investments at the end of Quarter 4 £19.69m

 

·         The council’s prudential borrowing position reflected actual borrowing undertaken from the Public Works Loans Board (PWLB)/Other Local Authorities and the amount of internal borrowing required to meet the actual costs of borrowing up to 31 March 2021.

 

The Chairman thanked the Officer and invited comments from Members of the Committee.

 

Note:              Councillor D. Cotton declared a non-pecuniary interest as he undertakes services at the crematorium.

 

Councillor Cotton then commented that it was unexpected to have monies unallocated under the covid support grant. It was clarified that the council had been developing a fluid discretionary grant scheme as time progressed in order to ensure those that required financial support were able to access it. The funds had been distributed to communities and businesses as quickly as had been possible and there was ongoing work to ensure those who did not meet the criteria could be supported under the discretionary grant scheme.

 

There was extensive discussion regarding the arrangements for the Market Rasen Leisure Centre and the details of recovering costs against borrowing. It was highlighted that the site was a council asset and the company running the leisure centre were managing the premises on behalf of the council. Any borrowing costs would be the responsibility of the council however costs generated by the contract for managing the site would help offset the cost of borrowing. Following further questions as to the repayment of the borrowing, it was clarified that the lifespan of the building was in excess of the contract length and it was never the intention for the management contract to repay the borrowing. Again, it was stated that the leisure centre was a council owned asset and the contract was for the site to be managed, not to take on the costs of the construction or associated borrowing.

 

A Member of Committee enquired as to the layout of the report and whether there was any merit in separating the information into different reports. Officers explained this had been the approach in the past however, given the interlinking information Members had chosen to receive the single report. This could be reviewed should Members wish to address it differently. Members confirmed they were satisfied with the current layout.

 

There was a question regarding the arrangements for Richmond House and the £20k contribution towards a conservatory. It was explained that the council owned Richmond House and it was leased to Gainsborough Town Council. It was used for weddings and the proposal was to build a conservatory at a cost of £60k, to be paid equally by the Town, District and County Councils. It was acknowledged that the conservatory would be an enhancement to the building as an asset of the council.

 

In response to a question about the use of reserves, Members heard that the council had acquired a number of properties and the debt against those was similar to the arrangements of a personal mortgage in that money could be paid off the borrowing. As a portfolio, assets had increased in value but there was a cost to recover.

 

Members also enquired as to the details of the costs of planning appeals and whether costs were likely to be recovered. It was explained that whilst the details of specific appeals were not provided, it was unlikely that costs would be recovered.

 

A Member of the Committee noted the details of the success of cash investments and whether there was scope to invest more money in CCLA at this time, as this provided the majority of the interest. Members heard that it was necessary to be mindful of security and liquidity of cash assets and to invest more in CCLA could limit access to funds if needed in the future. Although the interest rate was favourable, there would be no additional funds invested. This was noted to be a favourable approach, with the council avoiding having ‘all its eggs in one basket’.

 

Councillor O. Bierley noted the importance of the recommendation regarding the bid to the Levelling Up Fund. He explained this bid was important for the future of West Lindsey, with the fund being designed to assist those areas that were at risk of being ‘left behind’ in terms of development and progression. He noted there would be further communications shared with all Members and also took the opportunity to move all recommendations en bloc.

 

There were final comments regarding a potential small overspend for Officer time regarding the leisure facility; this was confirmed to be as a result of unexpected delays on the construction.

 

Having been moved and subsequently seconded, with thanks to Officers for a comprehensive report, the Chairman undertook the vote and it was

 

            RESOLVED that:

 

                        Revenue:     

                                   

a)    Members accept the forecast out-turn position of a £0.54m net contribution to reserves as at 31st March 2021 (see Section 2) relating to business as usual activity.

 

b)    Members approve the use of Earmarked Reserves of £0.683m and £0.024m from in year surpluses (2.4.1) for the purpose of making a voluntary revenue provision – total £0.707m.

 

c)    Members accept the contribution to General Fund Balances (2.4.2), and Earmarked Reserves (2.4.3).

 

d)    Members approve the amendment to the Fees and Charges schedule for the Crematorium (2.3.2), to be effective immediately and recommend to Council that any new Fees and Charges be implemented immediately.

 

e)    Members accept the Revenue budget carry forwards of £1.033m approved in year (Appendix 2).

 

f)     Members note the commitment of £125k to support the development of a bid to the Levelling Up Fund, as approved by Delegated Decision (2.5.2).

 

Capital:

 

g)    Members accept the current projected Capital Outturn as detailed in 3.1.2.

 

h)    Members approve the capital budget carry forwards of £5.442m detailed at 3.1.3.

 

Treasury:

 

i)     Members accept the report, the treasury activity and the prudential indicators.

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