Agenda item

Report of the Head of Strategic Finance

This report informs the Budget Panel of the revenue and capital outturns for 2011/2012 and will subsequently be reported to Cabinet on 17^th September.

The Panel received a report of the Head of Strategic Finance informing Members of the revenue and capital outturns for 2011/2012 which would be reported to Cabinet on 17 September 2012.

Councillor Derbyshire noted the carried forward under spend amounts and said that this always concerned him.

Councillor Khan asked whether investigations were carried out why under spending had occurred. 

The Head of Strategic Finance advised that there had to be acceptable reasons for an under spend being carried forward.  He explained about the carried forward amount for repairs.  It was agreed that this could be carried forward as it was necessary to have funds available should any emergency repairs need to be carried out.

Following a question from Councillor Derbyshire about the reserves, the Head of Strategic Finance said that due to a series of favourable outcomes, which were set out in the report, it had been possible to transfer a larger sum into the General Fund reserves.  The level of reserves would be reviewed further at the October meeting.

The Vice-Chair referred to Multi Storey Car Park Reserve.  He said that it was clear that there were insufficient reserves.

The Head of Strategic Finance advised that the current car park contract would be reviewed and that, as part of that process, this reserve would also be reviewed.

The Vice-Chair said that he did not want to see an increase of parking charges, possibly by 300%, without the ability to get people into the town by other methods.  It would also affect the retail trade.

The Head of Strategic Finance acknowledged the Vice-Chair's comments.

Councillor Khan asked whether it would be possible to use the £287,000 proposed for the Capital Fund Reserve to reduce Council Tax or indeed the £1.2m increase in reserves.

The Head of Strategic Finance responded that either could be used for that purpose.  In the case of the increase in reserves, this would reduce Council Tax by 15%, but it would only be relevant for one year.  The following year Council Tax would have to be increased.

Following a question about the Housing Benefit Subsidy Reserve, the Head of Finance Shared Services explained it had been practice to retain the balance on account with the Department of Works and Pensions (DWP) in general debtors rather than a personal account.  For 2011/12 the opening balance was transferred from general debtors.  The increase in transfer from the revenue account to the housing benefit subsidy reserve was the opening balance on the personal account.

The Head of Strategic Finance added that it was prudent to maintain this reserve in case it was needed for the 'claw back' of subsidy by the DWP. 

Councillor Meerabux asked whether there was any reserve which covered the Council if it broke commercial contracts, for example legal obligations.

The Head of Strategic Finance explained that there was no specific reserve which covered contractual disputes.  Reserves were set up for specific areas but there was some flexibility.

The Chair suggested that further debate was reserved for the next meeting.  He asked whether reserves could be used to pay for a council service rather than charging customers for that service.

The Head of Strategic Finance responded that certain reserves were for specific schemes.  The general revenue reserve could be used to pay for services but if it were an ongoing service then it would need to be repeated the following year or the service would need to make up the difference.

RESOLVED –

1.      that the revenue outturn as summarised at Appendix 1 to the report, supplementary notes at Appendices 1A to 1G and an over spend of £251,000 has occurred before end of year final account adjustments be noted.

2.      that specific unspent budgets have been carried forward to 2012/2013 in the sum of £301,337 and as detailed in Appendix 1E be noted.

3.      that the Reserves statements at Appendices 1F and 1G and due to end of year adjustments the overall level of reserves has increased by £1,230,408 (Appendix 1F) be noted.  The Panel's comments regarding the increase of the Capital Fund Reserve by £287,000 with a compensating reduction to the Economic Impact Reserve to be noted.

4.      that the capital outturn as detailed at Appendix 2 and the Council's present and future holding of capital receipts is virtually fully committed be noted.