Minutes:
The Committee considered the undernoted report:
“Relevant Background Information
The Strategic Policy and Resources Committee agreed on the 18 June 2010 that:-
· The council would produce financial reporting packs for the Strategic Policy and Resources Committee and each Standing Committee on a quarterly basis.
· The Budget and Transformation Panel would also receive monthly financial updates if there were any significant issues to report. In line with the Council’s financial reporting timetable, financial reporting packs, which outline the Council’s financial performance for quarter 3 2011/12, were presented to the Strategic Policy and Resources Committee on the 17 February 2012, after which departmental report packs can be distributed to each Standing Committee.
The reporting pack contains a summary dashboard of the financial indicators and an executive summary explaining the financial performance (Appendix 1). It also provides a more detailed explanation of each of the relevant indicators covering the year to date and forecast financial position, implications for reserves and payment of creditors and recovery of debt.
The style and layout of the financial reporting pack reflect the discussion and feedback arising from the members’ financial training at the end of September 2010.
Central finance and departmental management teams have worked together to develop the information within the reporting packs.
Key Issues
Current and Forecast Financial Position 2010/11
The financial position of the council at the end of quarter 3 is a net under spend of £1.48m, after allowing for the LPS claw back, the deficit on the gas pension scheme and the allocation of expenditure for 2011/12 projects .
The forecast year end position is an under spend of £879k, with the main components of the under spend being:-
· Departmental budgets are forecast to be under spent by £2.18m mainly due to a reduction in landfill costs through reduced tonnages and gate fee costs, savings in employee costs through unfilled posts and restructuring and slippage in corporate and departmental projects.
· The Land and Property Service have advised that the forecast rates claw back is now estimated at £277k, which is a significant reduction on the estimate of £967k advised to the council in December 2011.
· The deficit on the Gas Pension Fund of £650k arising from the revaluation of the scheme by AON Hewitt.
· The forecast £1.47m of expenditure on the revenue projects approved by the Strategic Policy and Resources Committee on the 23 September 2011, including the transfer of £600k to a specified reserve to fund the Titanic Centenary celebrations and the World Irish Dance Championships in 2012/13.
The financial reporting packs contain more detail on both the overall council position and the financial performance in each of the committees.
Capital Financing Expenditure
Capital financing expenditure is forecast to be balanced with the 2011/12 planned expenditure arising from the financing of current loans, new capital expenditure and the redemption of existing loans to support the sustainability of the City Investment Programme.
Reserves Position
The council’s general reserves at the end of 2010/11 were £10.43m. The forecast position at the year end is £13.32m arising from the forecast year end departmental contribution of £879k together with a further £990k of funds set aside from the SP&R programmes and prior year adjustments, such as rent reviews, which add a further £1.03m to reserves.
Better Services: Creditors and Debtors
The number of invoices paid to creditors paid within 30 days has increased from 69.1% at quarter 2, to 70.3% in quarter 3. The Investment Programme provides a commitment that the council will process 90% of its invoice payments within 28 days by 2015.
The overall debt position of the council has reduced from £4.1m at 30th June 2011 to £3.3m at quarter 3 this year as a result of the improvements to debt recovery processes and actions reported to the Committee on the 22 October 2010. The agreement of repayment plans with some debtors as part of these improvements has impacted on the percentage of debt over 90 days, which has increased from 41.7% to 49.9%
Recommendations
Members are recommended to:
· Note the above report and associated financial reporting pack;
· Approve the payment of £650k to the Gas Pension Fund to address the deficiency on the Gas Pension Scheme arising from the revaluation undertaken by AON Hewitt.”
The Committee adopted the recommendations.