Financial Monitoring Quarterly Reports for 2019/20 - Quarter 1
- Meeting of Overview and Scrutiny Committee, Thursday, 5th September, 2019 6.00 pm (Item 23.)
- View the background to item 23.
With the agreement of the chair this item was moved up the agenda
The Assistant Director Financial Services & Revenues introduced the item. He commented that there is a new financial management code coming in, so to coincide with that the decision was made to improve and extend the financial information given to overview and scrutiny. This information is similar to the information that is given to Cabinet Agenda Planning (CAP) and Cabinet. He went on to comment that from recent reviewing and work done by the finance team there has been an update to the deficit analysis. There are savings expected however the temporary accommodations costs have increased.
Councillors thanked the Assistant Director Financial Services & Revenues for the report. Councillors asked if due to the current financial climate, will pensions be a larger liability on the council? The Assistant Director Financial Services & Revenues answered that pensions are a large expense for the council and the large £41m is not all bared by the council, it is valued and from that valuation the amount the council pays is calculated. This will be paid in April next year and contributions will cover the actual deficit over a 20 year period. He also commented that a recent court judgement (the McLeod Judgement December 2018) pensions are currently under government wide review.
Councillors commented that the report is much easier to understand than previous ones but with the council’s plain English and readability guidelines can the report be improved in the future to make it more accessible for everyone. They also asked if the terms positive variance and ERP could be defined for clarity.
The Assistant Director Financial Services & Revenues answered that the council is aiming for the report to be simpler in the future. He also answered that positive variance is an underspend on additional income, and ERP stands for Enterprise Resource Planning and is the council’s finance and HR system that they are in the process of being fully operational..
Councillors asked that with the forecasted deficit of £1.9m looking more like £1.5m how long can this be maintained with reserves, how robust is the council?
The Assistant Director Financial Services & Revenues answered that the £1.9m has reduced as a result of savings so the actual deficit figure is closer to £1.5m. The council is currently still using the transitional reserves and not the actual reserves. If the £1.5 million savings are made this year then the transitional reserves will be available for next year only.. The actual reserves can be used but this will diminish money to do projects identified by the council. The main intention of the council is to have a sustainable budget.
The Director of Operational Services commented that management agree with finance on this point and the council will not have a forward going role if the reserves are all used and it is critical that this doesn’t happen.
1. To accept the contents of the report, and the actions within the conclusion and management action section.
2. To consider the level of detail provided and whether more or less information is required.
Reasons for Recommendations
To assist the council in understanding the financial positon and particularly areas of over and under spend. This assists in identifying areas for review in the revised 2019/20 budget and the production of the 2020/21 budget.
- Financial Monitoring Quarterly Report for 2019/20 - Quarter 1, item 23. PDF 141 KB
- Enc. 1 for Financial Monitoring Quarterly Reports for 2019/20 - Quarter 1, item 23. PDF 122 KB