Agenda item

Report of Chief Executive.

1.         Approval granted to the slippage requests and other transfers to reserves outlined in Appendix 2 of the report to finance expenditure on specific items or projects in 2014/15.

2.         Approval granted to the transfer of £326k net income from Market Walk in 2013/14 split 80:20 between the Change Management Reserve and Equalisation Reserve (to limit the future impact of any potential reduction in income).

3.         The impact of the final capital expenditure outturn and approval of the re-phasing of capital budgets to 2014/15 be noted.

4.         Approval granted to the financing of the 2013/14 Capital Programme to maximise the use of funding resources available to the Council.

The report of the Chief Executive was presented by the Executive Member (Resources). 

The report presented the provisional revenue outturn figures for the Council as compared against the budgets and efficiency savings targets it set itself for the financial year 2013/14. 

The provisional outturn figures for the 2013/14 Capital Programme were presented and the Capital Programme was updated for financial years 2014/15 to 2016/17 to take account of the re-phasing of expenditure from 2013/14 and other proposed budget changes.

The accounts were provisional at this stage and subject to final checking and scrutiny by the Council’s external auditor.  Should there be any significant changes to the outturn as a result of this process a further report would be submitted to Executive Cabinet.

Members noted that in November 2013 the Council acquired the Market Walk Shopping Centre.  Executive Cabinet had previously approved that the net rental income from the shopping centre over the four months to financial year-end be transferred to two reserves. It was proposed to amend the share of resources to an 80:20 split between the Change Management Reserve and Market Walk Equalisation Reserve.

The net income to 31 March 2014, once all costs that fall on the Council had been deducted, was £326k.  This had increased compared to the initial forecasts and was largely due to the Council reducing the costs of financing the acquisition.  This had been achieved by the fact that some borrowing had been financed via internal cash balances that had been available, that alternatively would have been invested and only realised a very small rate of return.

The transfer to the change management reserve would help to fund future service reorganisation across the Council.  The creation of an equalisation reserve would smooth any possible adverse movement in income generation from the shopping centre should that occur in future years.  Variations in income levels were also mitigated against within the Council’s Medium Term Financial Strategy which contained a further minimum £100k ongoing contribution to this reserve over the next three years to 2016/17.

Members noted that the Business Rates Retention (BRR) scheme had been introduced in April 2013.  It provided a direct link between business rates growth or decline, and the amount of money the Council had to spend on local people and local services.  The Council was able to keep a proportion of business rates revenue, as well as growth generated on that revenue, within their local area.  Conversely any decline in Business Rates revenue levels reduced the income received by the Council.

A key element of the new regime was the impact that appeals had on the level of income received.  Should business rate payers be successful in appealing against the valuation placed on premises, upon which the charge was based, this would reduce the subsequent rate yield in 2014/15.  This might potentially lead to a further deficit chargeable in 2015/16.

Decision: 

1.         Approval granted to the slippage requests and other transfers to reserves outlined in Appendix 2 of the report to finance expenditure on specific items or projects in 2014/15.

2.         Approval granted to the transfer of £326k net income from Market Walk in 2013/14 split 80:20 between the Change Management Reserve and Equalisation Reserve (to limit the future impact of any potential reduction in income).

3.         The impact of the final capital expenditure outturn and approval of the re-phasing of capital budgets to 2014/15 be noted.

4.         Approval granted to the financing of the 2013/14 Capital Programme to maximise the use of funding resources available to the Council.

Reasons for decision: To ensure the Council’s budgetary targets are achieved.

Alternative options considered and rejected: None.