Agenda item

The Executive Member for Financial Sustainability presented the Q3 forecast to year-end report which was currently showing a £955k overspend. He said the list of variances was shown at Appendix C and 75% of the overspend related to BEAM. A change to the accounting policy to capitalise on interest had resulted in a reduced interest payment of £340k. He said that work was ongoing to reduce outstanding debt and old debt over 180 days totalled £2.2 million.

Councillor Brittain proposed that the recommendations in the report be supported. Councillor Dumont seconded the proposal.

Councillor Crystall referred to the reduction to the end of year overspend and asked if this would continue to decrease over the financial year.

Councillor Brittain said that number was a predicted overspend and the fact that it was lower than the Q1 estimate did not mean that it would continue to get lower. He said it would depend on outcomes at BEAM.

Councillor Daar referred to paragraph 2.3 and the moving of £160k to reserves to meet future potential losses on property funds.

Councillor Brittain said the money had been invested into two property funds and these were in the process of being wound up for differing reasons. He said that the likely capital received back from funds would be less than the council put in, but the exact amount was still unknown. It was anticipated that the council would know within the next three to six months.

Councillor Dumont referred to the 75% overspend on BEAM and highlighted how unpredictable things could be. He recognised the good work within the outstanding aged debt.

Councillor Brittain said work was being done and the debt figure would decrease over the next six months as issues were resolved. He said that a lot of it would be resolved by writing it off as a lot of the debt was not recoverable.

Councillor Deering referred to paragraph 2.7 and that debt over 180 days had gone up which suggested this was fresh debt. He said the fresher the debt, the greater the chance of it getting paid.

Councillor Brittain said that one of the issues raised during the work was that some of the invoices that the council was raising were not valid so things in the debt account were there that should not have been counted as income.

Councillor Deering asked if the team would be going after fresh debt.

Councillor Brittain said that whilst looking at the old debt, the department could understand why it was there. He said that he understood the point about catching up on recent debt, but the exercise had to be done to identify old debt that was recoverable. He said that systems were being changed to avoid debt occurring in the first place by moving people onto direct debits.

The motion to support the recommendations having been proposed and seconded was put to the meeting and upon a vote being taken, was declared CARRIED.

RESOLVED – that (A) The reasons for the net revenue budget end of year projected overspend of £955k be noted; and

(B)   the capital programme forecast outturn of £9.083m, carry forward of £7.835m be noted.