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MAIDSTONE BOROUGH COUNCIL
CABINET
18 MAY 2011
REPORT OF HEAD OF FINANCE & CUSTOMER SERVICES
Report prepared by Paul Riley
Head of Finance & Customer Services
1. PROVISIONAL REVENUE AND CAPITAL OUTTURN 2010/11
1.1 Issue for Decision
1.1.1 This report summarises
the provisional revenue and capital outturn figures for 2010/11 and provides
some initial consideration of the impact of these figures on future financial
planning.
1.1.2 The report also gives Cabinet provisional figures on treasury management and other balance sheets items.
1.2 Recommendation of Head of Finance & Customer Services
1.2.1 It is recommended
that Cabinet:-
a)
Note
the provisional outturn figures for revenue and capital for 2010/11;
b)
Agree
the provisional funding of capital expenditure in 2010/11;
c)
Agree
the carry forward of revenue resources of £1.73m for the financing of future
capital expenditure;
d) Note the carry
forward of grant funding as detailed in paragraph 1.4.4.
e)
Consider
and approve the revenue carry forward requests detailed in Appendix B from
2010/11 into 2011/12 based on the previously agreed criteria;
f)
Note
the impact on the balance sheet of the provisional outturn 2010/11.
1.3 Reasons for Recommendation
1.3.1 The purpose of this report is to facilitate good financial management. This report gives Cabinet provisional figures for revenue and capital outturn, to allow early consideration of any issues resulting from them not only in the current financial year but in terms of any impact on the Medium Term Financial Strategy.
1.3.2 Final expenditure
figures for revenue and capital will be reported to June 2011 Cabinet meeting,
along with the key issues from the Statement of Accounts and Treasury
Management performance. These reports will be followed, at the July Cabinet
Meeting, by the initial Budget Strategy report for the following financial year
and the Medium Term Financial Projection for a further four years.
1.4
Revenue
1.4.1 Attached at APPENDIX
A is a summary of the provisional revenue outturn for 2010/11 compared to
the revised estimate approved by Cabinet in February 2011 and Council in March
2011. Also shown is the amended revised estimate, taking into account any
changes in capital financing costs necessitated by changes in actual capital expenditure.
This is provided to ensure a more accurate comparison with the outturn
position, as it eliminates fluctuations in capital spend, which is dealt with
later in this report. Appendix A shows a net unadjusted underspend of £3.99m.
1.4.2 Appendix A details
the variance by portfolio and the major reasons for the variances are as
follows:
a) Leader the
savings as a result of the early changes to the establishment have been
accumulated within the contingency budget in this portfolio. This portfolio
also holds the unused contingency of £0.2m for concessionary fares. Together
these total £0.56m;
b) Corporate Services
the budget for revenue support to the capital programme is within this
portfolio and a balance of £1.73m remains of this sum and is dealt with in
detail later in this report;
c) Environment the
budget variance represents the balance of WRAP funding for the food waste
service and the underspend on concessionary fares of £0.36m;
d) Regeneration the
under spend represents the balance of growth point revenue grant. This grant
has been programmed for expenditure on schemes over a minimum three year
period. A re-assessment of scheme priorities will occur in 2011/12 to ensure
focus on the strategic plan priorities.
1.4.3 Proposals for the
financing of the capital programme, detailed later in this report, include the
use of capital receipts and grants. This means resources identified from
revenue budgets to finance capital expenditure are not required until 2011/12.
The variance of £1.73m remains essential to the financing of the future capital
programme. It is recommended that this money is set aside for this use in
2011/12, in order for the capital programme to remain affordable.
1.4.4 After adjusting the
variance of £3.99m for the unused capital support, detailed above, a balance of
£2.26m remains. Of this sum there is £0.86m of grant aid that has not been
spent in 2010/11 and will be carried forward for use on the specified schemes
in 2011/12. Details of the specific grants are given in the table below and,
following this carry forward, £1.4m remains of the variance.
Service |
Balance of Grant £ |
Description |
Museum |
2,400 |
Two grants: · Japanese Access · Regimental Association Bartlett request |
Playground Improvements |
12,502 |
Lottery Grant for Youth Involvement Project |
Community Development Sport |
17,600 |
Five Grants: · KCC Sports Development Clubmark · KCC Joint Youth Agreement · Home Office Community Safety, Boxing Development · Youth Opportunity Fund DMAX · FLO Referrals Hotfoot |
Waste |
170,000 |
WRAP grant for food waste service |
Pollution Control |
22,000 |
Air Quality Grant |
Planning & related services |
168,700 |
Housing & Planning Delivery Grant |
Youth Forum |
700 |
Youth Opportunity Fund Dance Project |
Community Safety |
44,000 |
Multiple Initiatives from partnership funds |
Social Inclusion |
26,000 |
Two Grants: · South East Employers LSP Development · West Kent PCT Heath Preventative Fund |
Business Development |
363,600 |
Growth Point Revenue Grant |
Sustainable Development |
36,100 |
Performance Reward Grant |
Total |
863,602 |
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1.4.5 Attached as APPENDIX
B is a schedule of provisional carry forward requests, into 2011/12, totalling
£0.25m. These have been categorised according to the criteria used for
decision making by Cabinet last year. This gives two categories in the table:
a) Request where a contractual commitment exists;
b)
Other
requests.
1.4.6 If the full list of
requests for carry forward are approved the balance available for other actions
or transfer to general balances is £1.15m. It is recommended that Cabinet
consider the requests in Appendix B and give approval as required.
1.4.7 Elsewhere on this
agenda, Cabinet will consider a report on urgent works to the heating system at
the Hazlitt Theatre. That report considers this revenue underspend as one
option to identify £0.31m of funding for these works.
1.5
Capital
1.5.1 Attached at APPENDIX
C is a summary of capital spend against the revised estimate. This has
identified only minor slippage since the programme was agreed by Council in
March 2011. This figure is the net effect of slippage into and from 2011/12.
1.5.2 The expenditure
outlined in Appendix C can be funded from capital resources. Proposed funding
is summarised in the following table:
Resources |
£,000 |
|
|
Capital Receipts |
4,063 |
Capital Grants |
3,648 |
Revenue |
48 |
|
|
Total |
7,759 |
This
funding proposal is developed on the basis of using the most flexible resources
last. This means that grants and capital receipts have been utilised in
preference to revenue support. The consequence of this decision is detailed in
paragraph 1.4.2 which recommends the carry forward of revenue resources set
aside to finance capital expenditure as this is the resource that remains
unused. It is recommended that Cabinet consider and approve this provisional
financing of the capital programme.
1.6
Balance
Sheet
1.6.1 The provisional
outturn figures have an impact on various elements of the Balance Sheet and
these are summarised as follows.
1.6.2 Asset Sales
1.6.3 The revised
estimate assumed asset sales for 2010/11 of £5.6m. The provisional outturn
figures show cash backed Capital Receipts, net of costs, of £5.3m. This is a shortfall
of £0.3m which relates to cost such as the demolition of the Tonbridge Road
sites, which regulations allow to be offset against sale proceeds. Not all
available receipts have been utilised in the financing of the capital
programme, these receipts will be required to finance future years
expenditure.
1.6.4 Investments
1.6.5 The Treasury
Management Strategy report to Cabinet agreed in February 2011 anticipated year
end investments of approximately £18.0m. The actual investment at March 2010 totalled
£21.0m. The provisional assessment of the increase shows that the main
elements of the increase include the following:-
Reason |
£000 |
Revenue Slippage as detailed in the report |
1,000 |
Grant to be repaid to DWP/ DCLG |
2,000 |
1.6.6 The overall changes
to the level of investments will have no impact on the Strategy itself. The
changes will have a short term impact as the additional resources will be
required during the course of 2011/12.
1.6.7 Daily monitoring of
cash-flow has confirmed that the Prudential Indicators that Council set for
2010/11 have been complied with.
1.6.8 Fixed assets
1.6.9 The capital
investment achieved in 2010/11 resulted in investment in the Councils property
portfolio of £4.06m out of a total spend of £7.76m. The balance of the spend
is in areas such as support for social housing, renovation grants, etc which do
not contribute to the Authoritys asset base and have been written off, through
the revenue account, as deferred charges.
1.6.10 Useable capital receipts
1.6.11 As a result of the
level of capital investment and the level of capital receipts received in
2010/11, the level of useable capital receipts has decreased from £2m at March
2010 to £1.5m at March 2011.
1.6.12 Balances
1.6.13 Balances are set
out in APPENDIX D. The overall level of balances at March 2011 will be £10.0m,
compared to £8.4m at March 2010. However, after allowing for the commitment to
carry forwards and the planned use in 2011/12, the provisional level of
uncommitted balances is £3.8m.
1.7 Alternative Action and why not Recommended
1.7.1 The reporting of revenue outturn could wait until Cabinet in June 2011, when final figures are available in the Statement of Accounts prior to external audit. Providing provisional outturn to Cabinet at this time facilitates good financial management and aids consideration of issues within the current financial year and helps inform future budget strategy.
1.8 Impact on Corporate Objectives
1.8.1 The financial resources spent in 2010/11 and reported here reflect corporate priorities. Underspend on those resources will be carried forward in accordance with those corporate priorities and previous commitments.
1.9
Risk
Management
1.9.1 At this stage the financial analysis is provisional and contains some estimated values. Monthly financial monitoring by officers and quarterly by Cabinet improve the accuracy of the provisional figures. These figures are produced to a timetable for the completion of the Statement of Accounts and all essential work is complete at this stage.
1.10
Other
Implications
1.10.1
1. Financial
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2. Staffing
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3. Legal
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4. Equality Impact Needs Assessment
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5. Environmental/Sustainable Development
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6. Community Safety
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7. Human Rights Act
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8. Procurement
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9. Asset Management
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1.10.2 The financial implications are incorporated in the body of the report.
1.11 Relevant Documents
1.11.1 Appendices
Appendix A Summary Provisional Revenue Outturn
Appendix B Schedule of Carry Forward Requests
Appendix C Summary Provisional Capital Outturn
Appendix D Provisional General Fund Balances
1.11.2 Background
Documents
Budget Monitoring report 2010/11
Cabinet quarterly monitoring report 2010/11
Agresso General Ledger system reports
IS THIS A KEY DECISION REPORT?
Yes No
If yes, when did it first appear in the Forward Plan?
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This is a Key Decision because: ..
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Wards/Parishes affected: ..
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