Agenda item

The report presented the revenue outturn position and the impact of this on the Authority’s usable reserves.  The overall outturn position showed a slight overspend of £7k which was slightly lower than the £100k overspend previously forecast.

The annual budget for the year had been amended to reflect a slight increase in the overall business rates being retained (comprising Section 31 grant from the Government and local rates paid over by billing authorities).  This had resulted in an additional £35k of income being received in 2017/18, and as a result the overall revenue budget had increased to £53.968m.  After allowing for net transfer from earmarked reserves of £50k the final outturn position showed net expenditure of £53.975m, giving a total overspend for the financial year of £7k.

The final position within individual departments was largely consistent with that reported throughout the year, and specifically the forecast presented to the March Resources Committee.  As previously reported, the majority of underspends during 2017/18 had already been reflected in 2018/19 budgets.  The detailed final revenue position was set out in Appendix 1 as now considered by Members, with major variances being summarised in the report.

It was noted that performance exceeded the efficiency target largely as a result of staffing savings made and procurement savings in respect of contracts let during the year.  The shortfall on property was due to specific additional property works undertaken in year.

Any relevant under/over spend on the revenue budget was transferred to the DFM reserve, held within earmarked reserves, as set out below, with any remaining balance either being a contribution to, or a drawdown from, the General Reserve.

The DFM reserve enabled budget holders to carry forward any surplus or deficit from one financial year to the next, giving greater flexibility in managing budgets thereby optimising the use of available financial resources and facilitating better value for money.  The principles being that any overspends and 50% of any underspends were carried forward into the new financial year, subject to a £25k maximum, other than where a specific business case could be made. The remaining 50% of any underspend was transferred to the authority’s general reserve. As a result of this £17k was drawn down from the DFM reserve, leaving a balance of £10k to transfer to the General Reserve.  A further review of the levels of individual DFM reserves was undertaken to ensure that they were reasonable and that budget holders were not building up excessive reserves. The latest such review had identified a reduction of £113k, with this amount contributing to the creation of an innovations reserve.

In response to Member questions regarding increases to the number of domestic and commercial premises being built in Lancashire, the Director of Corporate Services confirmed that details of increases to the tax base were included in the budget report presented to Members in February.  It was noted that details of the numbers and costs of new hydrants purchased over the last 2 – 3 years would be brought to a future meeting, with the view of determining whether it was feasible to negotiate that these be supplied by the building contractor or water supplier.

RESOLVED: - That the Committee:-

i.      Noted the additional income receivable in respect of our proportion of business rates;

ii.    Noted the outturn position on the 2017/18 revenue budget as presented;

iii.   Noted the transfer to earmarked reserves of £220k in respect of PPE and £152k in respect of Apprentices;

iv.   Agreed the proposed drawdown of £17k from the DFM Reserve;

v.     Agreed the proposed transfer of £10k to the General Reserve;

vi.   Agreed the proposed transfer of £113k from DFM Reserve to Other Earmarked Reserves (innovations reserve), and the resultant level of DFM reserve, £297k.