Agenda item

To consider a report by the Chief Accountant (copy enclosed) which provides an update of the final revenue position and the proposed treatment of balances.

 

A copy of a report by the Chief Accountant, which provided an update of the final revenue position and the proposed treatment of balances, had been circulated with the papers for the meeting.

 

The final outturn report had been accepted by Cabinet on the 25^th June 2013.  The report detailed the final position at financial year end for County Council to consider and approve the treatment of reserves and balances proposed.  The first draft of the Annual Statement of Accounts for 2012/13 would be submitted to the external auditors on the 28^th June, and the audited accounts presented to the Corporate Governance Committee in September for formal approval.

 

The overall financial outturn position for 2012/13 had been an under spend against the approved budget, which together with an increase in the yield from Council Tax strengthens the financial position of the Council.  As a consequence it had been possible to make recommendations for the transfer of funds to specific reserves to assist the Council in addressing the severe financial pressures of the next few years and begin to establish cash resources to deliver the Corporate Plan.  The final Revenue Outturn figures had been detailed in Appendix 1. The final position on service and corporate budgets had been an under spend of £1.525m.

 

The outturn position for services and corporate budgets had been £530k higher than previously reported to Cabinet in March.  The most significant movement had been within School Improvement & Inclusion (£223k).  The final position for Legal and Democratic Services had improved by £76k and the position on corporate budgets had improved by £113k from the forecast reported in March.  Services had continued to be proactive in planning for savings for future years, and the financial impact of some of those proposals began to take affect toward the end of 2012/13.  Services reported commitments against balances of £849k in March.  The majority of balances had been forecast because of timing issues and committed service balances now stood at £1.139m with further details provided in the report.

 

Expenditure on schools had been £1.069m below the delegated budget with Special schools having improved by £490k.  The factors relating to the movement on Special Schools had been included in the report.  School balances stood at £2.870m and details of the balances had been included in Appendix 4.

 

The Council budgeted to make a contribution to balances of £300k, which in keeping with previous reports, had been assumed in the final outturn position.  The Council budgeted to make contributions to the funding of the Corporate Plan which required around £25m of cash and £52m of borrowing to deliver the Council’s ambitions.  The 2012/13 budget assumed £2.073m would be generated through priority funding allocated to services and budgeted provisions within corporate budgets.

 

Further information regarding final service outturn had been detailed in the report as follows:-

 

Business Planning & Performance – the final position was an under spend of £60k.

Finance & Assets - under spend of £16k.

Highways & Environment - position of £278k under, an improvement of £15k from the forecast in March.

Planning & Regulatory - proposed to be used to fund restructuring costs as part of delivering savings for 2013/14.

Adult & Business Service - shown as achieving the budget. 

Children & Family Service – reported at £148k.

Housing & Community Development - arisen due to a review of external grant funding at the end of the year highlighted additional claimable costs.

Communications, Marketing & Leisure - the final outturn position was an under spend of £37.5k.

ICT/Business Transformation - budget under by £108k.

Customers and Education Support - an under spend of £245k.

School Improvement - an under spend of £349k.

Council Tax - impacted upon by the number of dwellings in the County, together with, a high level of tax collection of over 98%.  The final level of Council Tax yield had been £315k higher than the original estimate.

 

Given the position overall within services, it had been proposed that departments carry forward any net under spends in full to help deliver the 2013/14 budget strategy and meet existing commitments.  Services would be required to provide more detail, in the Finance Report to Cabinet in October, on how the balances brought forward had been used in 2013/14.  The final position meant that the Council had £651k cash funding available.  This was a significant achievement and the Council would need to ensure that the funding was used in the most effective way, and it had been proposed that this contribute to the cash reserves required to fund the Corporate Plan. 

 

The Council’s ambitious scheme of capital investment through the Corporate Plan required a significant amount of cash and a Corporate Plan Reserve of approximately £25m had been established for this purpose.  A review of current funds to determine whether the current levels of balances and reserves were reasonable, and whether some reserves could be moved into the Corporate Plan Reserve, had been completed.  The review had concluded that it would be appropriate to transfer £6.274m from existing reserves to the Corporate Plan Reserve.

 

Details of all earmarked reserves had been included as Appendix 2, and a summary of the transfers proposed as reported to the Corporate Governance Committee included as Appendix 3.  A number of other contributions to and from Reserves and Provisions had been allowed for within the accounts and these had been detailed in Appendix 2 and would require Council approval.  Major movements to reserves not already highlighted had been included in the report and related to:-

 

·                                            £562k earmarked to fund protection for schools adversely impacted by the recent formula funding changes.

·                                            £185k added to the Insurance Reserve to cover ongoing liabilities in respect of MMI, former insurer of Denbighshire’s predecessor authorities, and other potential claims.  The Head of Finance and Assets (HFA) responded to a question from Councilor Hugh Irving and explained that the potential liability and number of claims could increase in the future.

·                                            Funding had moved from the Single Status reserve to a provision to fund equal pay claims

 

In reply to a question from Councillor S.A. Davies regarding the Yellow Bus reserve of £101,000, the HFA provided an explanation for the acquisition of the bus and agreed to provide a further report in respect of the contingency fund for the possible provision of a replacement at a future date. 

 

The HFA responded to a question from Councillor M.Ll. Davies and provided an explanation in respect of the figures included in Appendices 2 and 3 to the report. 

 

RESOLVED – that Council approve the final revenue outturn position for 2012/13 and the treatment of reserves and balances detailed in the report.