Venue: The Paralympic Room, Aylesbury Vale District Council, The Gateway, Gatehouse Road, Aylesbury, HP19 8FF
Contact: Craig Saunders; Email: firstname.lastname@example.org;
To approve as a correct record the Minutes of the meeting held on 9 September, 2019, copy attached as an appendix.
That the minutes of the meeting held on 9 September, 2019, be approved as a correct record.
To consider the attached report.
Contact Officer: Nuala Donnelly 01296 585164
The Authority’s Treasury Management Policy required an annual report to be brought to Council after each year end and a mid year report for the current year. A synopsis of treasury management activities had been included in the Quarterly Financial Digest submitted to the meeting.
Members were informed that the amount of money deposited with banks and building societies at the end of September 2019 was £33 million with another £3.2 million held in the two Money Market Funds. The outstanding balance on borrowings was £18.5m. As there had been no new borrowing taken out, there had been no change to the Council’s Authorised and Operational Limits.
The impact of the announcement of a single Unitary District Council for Buckinghamshire on the Treasury Management of the Council was being assessed through a working group and would be progressed over the coming months.
The objectives for the Treasury Management team for 2019/20 had been laid out in the Treasury Management Strategy agreed by Council in February 2019. The main activities continued to be:-
· Foremost, to maintain, the security of the Council’s deposits by only depositing with trusted financial institutions and limiting the size and length of deposit with each organisation.
· To directly manage a range of deposits in order to provide sufficient flexibility to meet day to day operational needs.
· To only undertake new long term borrowing where the business case justifies it.
The Treasury Management team continued to invest money in line with its list of approved (safe) institutions, varying the amounts and length of deposit according to the institution and the cash flow requirements at the time. Historically, the majority of the Council’s lending had been with Building Societies but over the last year the Council had invested more of it’s portfolio with major UK banks and had also began depositing funds with other Local Authorities as a more secure option. The lending list was monitored throughout the year to take account of any changes within the sector i.e. building society mergers / conversions to banks, and ratings changes.
The Council ability to manage capital spend without additional borrowing had resulted in financial efficiencies and savings on the cost of borrowing. The variance on income generated had been offset by savings on interest charges due, due to lower than planned level of borrowing. In the six months of the financial year, a saving of £123,000 was reported on bank charges payable. Members were informed that the local government landscape for borrowing might change over time. In early October 2019, Whitehall had announced a whole percentage point increase in the rate of borrowing from the Public Works Loan Board (PWLB), for new loans. This would impact on future borrowing plans by Councils.
Although the levels of investment balances had been reducing, the rates of return earned had been assessed as being above average. For the 6 months to the end of September 2019, the weighted average rate of return for the Council was 0.85% on investments of £36.2m. The performance ... view the full minutes text for item 2.
To consider the attached report and appendix.
Contact Officer: Nuala Donnelly 01296 585164
The Committee received the Quarterly Financial Digest for the period to 1 April to 30 September 2019, which represented the position after the first 6 months of the 2019-20 financial year. The digest was attached as Appendix 1 to the Committee report, and Members referred to it during discussions.
As at the end of September 2019, the Council was reporting a net overspend against budgets of £783,376.. While a number of risks and issues had been identified and their impact was being monitored and managed, it was anticipated that any additional cost pressures would be offset by budget underspends and additional income across the Council and a forecast balanced budget would be delivered for the 2019-20 financial year. This had also been assumed in the Medium Term Financial Plan (MTFP) agreed by Council in February 2019.
Members were assured that timely reporting had allowed for mitigating actions to be identified by budget holders and managers across the Council to address the emerging financial position. 2019-20 represents an exceptional year for the Council, with the move to the single unitary council in April 2020. Whilst every effort was being made to deliver a balanced budget and remain focused on continuity of service delivery, the decision had a profound impact on strategy and future planning.
The forecast level of balances for the financial year was reported as £2.353m, higher than planned. The increase to the working balances was a result of the 2018-19 financial outturn being better than forecast. Earmarked reserves were held for legitimate reasons and the use of earmarked reserves was an essential part of sound financial planning.
The year to date forecast position currently assumed the use of reserves to support some one off or exceptional spend and to offset agency costs for planning where there were unusual pressures. The use of further reserves would be assessed during the year.
Details of the significant cost pressures and efficiencies for the year to date included:-
· Savings against budget in relation to transitional relief for business rates (£110,000).
· Budget savings arising as a result of the delay in implementation of the taxi token scheme (£16,000).
· Within the environment and leisure portfolio, an overspend on staff of £103,000 relates to the use of agency staff working on planning enforcement during a period of change and restructure as a review of work processes was undertaken to realise service improvements. It was anticipated that the use of agency staff would cease in the final quarter of the financial year.
· A year–to-date overspend against budget was also reported for the housing benefit department (£45,000). Additional staff had been engaged to address a back log of work. Vacancies in this area had also led to agency use at premium cost. The department was benchmarked to be lean compared to other authorities. Currently, the staffing position was much improved and all temporary staff had been released other than those covering current vacancies or those who were funded. No recurrent staffing pressures had been assumed.
· For the period ... view the full minutes text for item 3.
To consider agenda items for the meeting to be held on 17 February 2020 – No items as yet.
There were no suggestions for agenda items to come to the next, and very last, meeting of the Scrutiny Committee on 17 February 2020.