Agenda item

Report of the Deputy Chief Executive (Place)

The Committee considered a report of the Deputy Chief Executive (Place) which provided the forecast outturn position for the revenue and capital expenditure and the Council’s treasury management activity as at the end of Quarter 3 (December 2018).

The Committee noted that the report would had been considered by Cabinet at its meeting held on 12^th February 2019.

The Cabinet had approved the Council’s revenue budget of £234.8m on the 20th February 2018 and a Directorate Capital Programme of £262.5m.  The headline revenue forecast for 2018/19, at Quarter 3, was an under-spend of £1.8m.  At the same point in 2017/18 there was a projected overspend of £1.8m.  The headline capital position reported £58.6m of expenditure rescheduled into 2019/20 reflecting the reality that some of the Council’s major schemes would fall significantly short of their planned progress this year.  Notwithstanding this rescheduling, the Council was still expected to deliver its largest capital programme in the modern era.

The revenue position continued to reflect overspends in several service areas that had been subject to recent budgetary pressures and which continued to demand management attention.  This was most pressing and significant in relation to housing and homelessness services, the financial position for which had further worsened.  Although a range of plans were being implemented, these circumstances were expected to in place for some time.  This was reflected in the financial proposals within the 2019/20 Budget report that was approved by Council on 19^th February 2019.

The change in the overall revenue bottom line was due to several positive unbudgeted movements including Coventry and Solihull Waste Disposal Company dividends and improved investment returns.  These were opportune movements at a time when the Council needed to assess its financial resilience in relation to current financial risks and potential future shocks.  It was likely that recommendations would be brought within June’s financial outturn report regarding the need to reinforce the level of reserves to address this.  Ahead of this, the report submitted had recommended contributing £1.2m of Business Rates Levy surplus, announced as part of the Government’s Provisional Settlement in December, to the Council’s Business Rates reserve, which the Cabinet had approved.

The Council’s capital spending was projected to be £173.7m for the year, a net decrease of £48.7m on the programme planned at Quarter 2.  Previous quarterly reports alerted the possibility of significant capital slippage later in the budgetary cycle and this risk was one that had materialised.  Significant movements had occurred in a number of schemes, including Whitley South, City Centre South and the Friargate regeneration scheme.  However, the Council had now finalised the legal agreement establishing the Friargate Joint Venture Company with Cannon Kirk which should enable progress on the Friargate Scheme.

The report also set out the current position in relation to treasury management activity in 2018/19, including interest rates; long term (capital) borrowing; short term (temporary) borrowing; external investments and the prudential indicators and prudential code.

In considering the report, the Committee expressed their concern in relation to the financial pressures identified for the Streetpride and Parks service area in Appendix 1, in particular £160k pressure relating to car parking income at Coombe Country Park.  The Committee were advised that this related to a breakdown of the equipment at the park and that alternative arrangements had been put in place on a temporary basis.  The Committee requested that the current position be investigated and the outcome be circulated to the Committee.

RESOLVED that the Audit and Procurement Committee:

1.  Note the 2018/19 Third Quarter Financial Monitoring Report (to December 2018) and indicate that there are no comments to pass to the Cabinet.

2.  That an investigation be undertaken in relation to the situation at Coombe Country Park in relation to the parking and an update be circulated to the Committee.