To receive and note a financial update report that was presented to the Cabinet on 21 November 2019. This report provides a financial update in respect of the income and expenditure so far in the year.
Minutes:
The Group had before it, and NOTED, a report * from the Group Manager for Financial Services which had been presented to the Cabinet on 21 November 2019 presenting a financial update in respect of the income and expenditure so far in the year.
The contents of the report were outlined with particular reference to the following:
· The Group were reminded that there were a lot of demand led services across the Council which meant that forecasts had to be caveated..
· The forecasted General Fund surplus for the current year was £29k. The table at 3.2 showed all the variances both positive and negative in relation to this.
· There had been a number of factors accounting for the improvement in forecast from Quarter One, most significant of which were a number of savings through the shared waste scheme with Devon County Council. A significant amount had also been received in relation to a recent planning application.
· The Treasury Forecast had also been updated to reflect the fact that we did not need to borrow from the PWLB in year as previously forecast.
· It was explained that managers had been asked to clarify what was deliverable in the capital budget for the current year in terms of expenditure. This had proved much less than had originally been predicted, giving us a better cash position and hence more investment income.
· The Council had not had to borrow this year externally so had not had to pay the additional 1% which has been levied on PWLB rates. Interest rates that it had been getting on investments were less than 1%, therefore it had been using its own internal resources which had given it a preferential position.
Discussion took place with regard to:
· The word ‘impairment’ in relation to 3 Rivers Development Ltd. was explained to the Group as an accountancy term meaning there was a possibility a loan would not be repaid. This was supplemented with an explanation that it was quite right to bring this into the budget monitoring process and that the council needed to keep a close eye on this over the entire life of any loan.
· It was confirmed that loans from the council to 3 Rivers Development Ltd. were secured and interest was charged at a market rate.
· It was confirmed that regular monitoring of 3 Rivers took place at Cabinet level and also the Audit Committee which had oversight of the financial and governance aspects. The Economy Policy Development Group could have an input into the process when it came to monitoring the outcomes of each project and whether or not they were having an impact on the wider economy of Mid Devon. It was not the responsibility of this Group to get involved with the ‘nuts and bolts’ of the company’s operation. It was AGREED that this be placed on an agenda for a future meeting once there were outcomes to monitor.
Note: * Report previously circulated; copy attached to the signed minutes.
Supporting documents: