To provide Cabinet with an update on the Council’s financial performance for the year ended 31st March 2016.

The Head of Finance presented the report of the Chief Executive which provided an update on the Council’s financial performance for the year ended 31 March 2016. 

He informed Cabinet that Council on 25 February 2015 had approved a net revenue budget of £252.201 million for 2015-16 along with a capital programme of £36.441 million.  This was revised in the Medium Term Financial Strategy 2016-17 to 2019-20 in March 2016 to £31.689 million, and in May 2016 to £26.698 million.  He reported that the overall outturn at 31 March 2016 shows a balanced position, with Directorate budgets provided a net underspend of £1.639 million and corporate budgets a net underspend of £7.553 million.  The under spend on Directorate net budgets for the year is as a result of a number of factors including the maximisation of grant and other income, strict vacancy and sickness management, increased productivity on some trading accounts and savings resulting from improved systems and processes and delays in implementing some Directorate schemes.  The sum of £2.002 million was drawn down in year from approved earmarked reserves to meet specific one off pressures identified.  He stated that the under spend masks underlying budget pressures in some service budgets, mainly in the service areas of Looked After Children and Adult Social Care. 

The Head of Finance stated that the budget approved for 2015-16 included savings proposals of £11.225 million, (5.27% of net service budgets), £1.909 million of these proposals were not realised in 2015-16, but the expenditure associated with them had been offset by vacancy management and other savings elsewhere in the budget.  There remained a recurrent pressure on 2016-17 budgets which will need to be addressed by implementing the budget reduction proposals or identifying and delivering alternatives. 

The Head of Finance reported on the Capital Programme outturn for 2015-16, the budget for which had been revised in the MTFS in March 2016 and updated by Council in March 2016 totalling £26.698 million, taking into account new schemes and projected slippage into 2016-17.  He stated that the total budget for 2016-16 was £27.312 million, which takes into account additional approvals of £614,000 which generally comprised schemes funded by external grant and other funding sources not previously indicated.  He informed Cabinet that total expenditure at 31 March 2016 is £26.047 million, resulting in an over spend of £27,000 on BCBC resources.

The Head of Finance also reported that a review of the Council’s earmarked reserves had been undertaken which identified the need for £9.597 million to create new or enhance existing corporate reserves to meet the cost of future service reconfigurations, the Council’s Digital Transformation Programme, the estimated demolition costs of four Council buildings, potential costs from recent case law and inescapable capital investment works required to mitigate against health and safety risks.  He stated that Directorates were able to submit applications for new earmarked reserves.  Total Directorate earmarked reserves including carry forward reserves amount to £3.271 million, of which new Directorates’ reserves total £1.193 million.  He stated that during the year, Directorates had drawn down £524,000 from specific earmarked reserves; a balance of £792,000 was unwound as Directorates were able to meet the costs of the proposed earmarked expenditure from within their own budgets.  He informed Cabinet that new Directorate specific reserves of £1.193 million were created, which left a balance on Directorate specific earmarked reserves of £1.367 million.  He stated that Directorates also drew down £1.246 million from Corporate Reserves including the Major Claims Reserve and the Change Fund.  The remaining under spend of £154,000 would be transferred to the Council Fund.              

The Cabinet Member Resources congratulated the Finance Department for bringing the budget in with an under spend.  The Deputy Leader commended officers on increasing the level of reserves which was prudent to do so given the uncertainty in the economy as a result of the decision to leave the European Union.  

RESOLVED:            That Cabinet noted the revenue and capital outturn position for 2015-16.