Agenda item

Report of Chief Executive.

1.         The full year forecast position for the 2014/15 revenue budget and capital investment programme was noted.

2.         To request Council approval to transfer £100k of additional income from Market Walk to invest in the Town Centre Grants Programme and that any surplus additional income, currently forecast to be around £163k, be divided on a 80:20 basis between two reserves: the equalisation reserve to smooth any fall in forecast income from Market Walk in future years; and the change management reserve which would assist in funding future organisational change.

3.         The forecast position on the Council's reserves was noted.

4.         To request Council approve a £30k increase to the Adlington Play and Recreation budget in the capital programme, funded from Section 106 contributions.

5.         To request Council approve the proposed re-profiling of the Capital Programme to better reflect delivery in 2014/15.

(Councillor Peter Wilson declared a non-pecuniary interest in the recommendation relating to the Adlington Play and Recreation budget but stayed in the meeting)

The report of the Chief Executive was presented by the Executive Member (Resources), Councillor Peter Wilson.

The report set out the provisional revenue and capital outturn figures for the Council as compared against the budgets and efficiency savings targets set for the financial year 2014/15.

The projected revenue outturn currently showed a forecast underspend of £88,000 against budget (excluding additional net income from Market Walk). No action was required at this stage in the year.

The latest forecast excluded any variation to projected expenditure on investment items added to the budget in 2014/15.  These projects were forecast to fully expend in 2014/15 and should there be any balances remaining at year end this would be transferred into specific reserves and matched to expenditure in future years.

The forecast of capital expenditure in 2014/15 was £13.014m.  This figure included £6.650m to finance the Chorley East Health Centre.

The Council expected to make overall target savings of £130k in 2014/15 from management of the establishment.  Savings of £100k had already been achieved for the year, with the remaining balance expected to be achieved over the coming months.

The Council’s Medium Term Financial Strategy proposed that working balances were maintained at a level no lower than £2.0m due to the financial risks facing the Council.  The current forecast to the end of June showed that the General Fund balance could be around £2.277m.

Members noted that the budgeted net rental income from the Market Walk in 2014/15 was £543k.  The latest forecasts estimated that the Council would receive an additional £453k.  This was due to the letting of two vacant units, savings to operational costs and reduced costs of financing the acquisition.

Of the additional income forecast it was proposed to use £190k to fund design, planning and feasibility costs in relation to the extension to Market Walk and to transfer £100k to finance further investment in the Town Centre through the Town Centre Grants Programme to continue the Council’s support of new local businesses through the award of shop front and shop floor grants.

Members noted 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.

The latest information of income yield – net of costs for reliefs, cost of collection, bad debt and estimated appeals – was a small increase in Chorley’s share of retained rates of £9k.  At this stage the monitoring of performance against budgeted estimates for the local retention of business rates was subject to change due to the volatility of variables such as the outcome of outstanding appeals.  These latest estimates indicate the Council was meeting expectations included in the budget however further fluctuations would be closely monitored and any significant variances reported in the next monitoring report.

Decision:

1.         The full year forecast position for the 2014/15 revenue budget and capital investment programme was noted.

2.         To request Council approval to transfer £100k of additional income from Market Walk to invest in the Town Centre Grants Programme and that any surplus additional income, currently forecast to be around £163k, be divided on a 80:20 basis between two reserves: the equalisation reserve to smooth any fall in forecast income from Market Walk in future years; and the change management reserve which would assist in funding future organisational change.

3.         The forecast position on the Council's reserves was noted.

4.         To request Council approve a £30k increase to the Adlington Play and Recreation budget in the capital programme, funded from Section 106 contributions.

5.         To request Council approve the proposed re-profiling of the Capital Programme to better reflect delivery in 2014/15.

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

Alternative options considered and rejected: None.