Issue - meetings

Report of the Deputy Chief Executive (Place)

The Cabinet considered a report of the Director of Finance and Corporate Services, which set out the final revenue and capital outturn position for 2016/17 and reviewed treasury management activity and 2016/17 Prudential Indicators under the Prudential Code for Capital Finance.

The Cabinet noted that the Audit and Procurement Committee would also be considering the report at their meeting on 26^th June 2017.

The report indicated that the overall financial position included a revenue overspend of £0.7m, which was required to be funded by a contribution from the Council reserves.  At quarter 3 there had been a projected overspend of £4.8m and the report identified the underlying movements between quarter 3 and outturn which had resulted in an overall underlying net underspend of £4.1m in the final quarter and led to the overall overspend of £0.7m.

The Cabinet were advised that, consistent with the approval of the programme of staffing reductions approved by them in November 2015, £6.7m of costs had been incurred as a result of early retirement and voluntary redundancy decisions.

There had been a Capital Programme expenditure of £71m, which was £52m less than envisaged at the start of the year.  The quarter 3 monitoring report to Cabinet on 21^st February 2017 approved a revised capital budget of £81m for 2016/17.  Since then, there had been a net programme increase of £1.3 giving a final budget for the year of £82.3m.  Since February, a total of £12.5m net rescheduled spending had arisen on directorate capital programmes.  The report provided a scheme by scheme analysis of the rescheduling and accelerated spend.

The report sought retrospective approval for a change to the Capital Programme, reflecting final scheme costs on the completed Whitley Infrastructure, Friargate Bridgedeck and South West Coventry Junction Improvement schemes delivered by Costain.

There was also a reduction in the level of Council revenue reserves from £57m to £51m and an increase in balances held relating to capital grants and capital receipts to fund future projects from £12m to £30m.  Table 2 of the report provided a summary of reserve movements during the year.

In relation to Treasury Management Activity, the report indicated that political uncertainty had been the main driver of the economic landscape during 2016/17.  Uncertainty over the outcome of the US Presidential election and the UK’s future relationship with the EU resulted in significant market volatility during the year.  UK Inflation continued to be subdued in the first half of 2016/17, however, a sharp fall in the Sterling exchange following the EU referendum had an impact on import prices which resulted in inflation rising from 0.3% in April 2016 to 2.3% in March 2017.  Despite this uncertainty, the UK GDP grew steadily during the year and the unemployment rate dropped to 4.7% in February, its lowest level in 11 years.  The fall out from the EU Referendum also caused the Bank of England Base rate to be cut to 0.25% from 0.5%.  Current forecasts expected the base rate to stay at 0.25%  ...  view the full minutes text for item 4