The Business Finance Partner introduced the report, which forecast an overspend due to an increase in inflation.
The Chairman asked if the increase in interest rates for borrowing referred to in the report related to future borrowing. The Business Finance Partner said this related to the short-term borrowing which had already been entered into to fund capital commitments. Explaining that these borrowing rates had increased from what was budgeted for.
The Head of Strategic Finance and Property said that Treasury advice was to currently borrow short term (which was defined as 364 days or less) with other Local Authorities to avoid locking into long-term loan agreements. He said that the council sometimes acted as a lender itself dependent on its cash flow position, and that the increase in interest rates would also see an increase in the return on the council’s investments.
The Chairman asked for an update on the council’s aged debtors. The Business Finance Partner said that these debts continued to be monitored by officers, which had reduced by nearly £500,000 since March. She said that some of these debts were unrecoverable and provision had been made to cover these.
The Head of Strategic Finance and Property said that a restructure in the Finance Department would see jobs created in credit control, bringing back debtors from service areas to speed up processing and allow monitoring in house. He said that debt instruction through the Credit Protection Association cost £15.00 per case and had proved successful in the past.
The Chairman asked when these changes relating to debtors would happen. The Head of Strategic Finance and Property said that the income management system needed to be changed and this was not wanted mid-year. He said that he was aiming for change to take place in April 2023 but it was more likely this would be April 2024.
Councillor Crofton asked why the council was not using alternative debt collectors. The Head of Strategic Finance and Property said that the council’s debts were all different, with some requiring specialist recovery, for example benefit debts were recovered by the Department for Works and Pensions via a debtor’s ongoing benefit entitlement.
The Chairman referred to page 20 of the report and asked if the income received from Hertfordshire County Council in connection with landfill diversion could be quantified. The Finance Business Partner said that the amount of income received would be dependent on tonnages for all districts and can therefore vary.
The Chairman asked for a general outline of the council’s reserves. The Finance Business Partner said that the council held sufficient reserves, and that there were no specific comments regarding the reserves from auditors.
The Chairman asked if the predicted overspend could increase. The Finance Business Partner said that this a possibility, with Quarter 2 monitoring to begin next week. She said that officers would be in a better position to update Members following this.
RESOLVED – that the Financial Management 2022/2023 – Quarter 1 Forecast to Year End Report be received.