Agenda item

The Director of Finance and Resources submitted for the Committees consideration the following report:

“1.0      Purpose of Report

1.1         This report presents the Quarter 2 financial position for the Council including a forecast of the year end outturn. It includes a reporting pack with a summary of the financial indicators and an executive summary (Appendix 1). It also provides a more detailed explanation of each of the relevant indicators and the forecast outturn for the year.

2.0       Recommendations

2.1       Members are asked to note the report and agree that, given the forecast shortfall in available balances arising from the Rates Clawback and Primark Recovery commitments, no further in year budget reallocations should be considered until the year end position is presented to Committee in June 2019.

3.0       Main report

            Current and Forecast Financial Position 2018/19

3.1       The Departmental year end forecast is a net under spend of £1,225k which represents a variance of 0.9% of the annual net expenditure budget. The capital financing budget is forecast to be underspent by £1m and a specified reserves balance of £135k is forecast to be available at the year end. The total forecast of available balances is therefore £2,359k.

3.2       The District Rate forecast by the Land and Property Service (LPS) is a clawback of £1,201k and the Council has committed £1,250k of Primark Recovery Expenditure, excluding the £790k cash flow from general reserves, giving a total expenditure commitment of £2,450k. This would result in a funding shortfall of £90k.

3.3       The Quarter 2 forecast position is summarised in Table 1 below.

Table 1: Quarter 2 2018/19 Forecast

            Rates Finalisation

3.4       The Quarter 2 forecast from LPS is a clawback of £1.201k. This includes an estimated rates clawback of £1.074k and de-rating grant clawback of £127k. This clawback position is largely due to movements in the non-domestic rate base and the loss of rate income from businesses affected by the Primark fire.

            Capital Projects

3.5       Planned capital expenditure for 2018/19 approved as part of the capital programme is £51.16m with forecast expenditure for the year of £41.10m.

3.6       The Summary Dashboard on Page 2 of the attached performance report summarises forecast expenditure on other capital programme including Non-Recurring Projects (£1,867k), Feasibility Fund (£250k) and projects in the new boundary areas (£135k). 

3.7       Committed expenditure approved by the Committee on Belfast Investment Fund projects is £21.90m, with a further £4.95m committed on LIF 1 projects and £3.92m on LIF 2 projects. 

            Capital Financing

3.8       The summary dashboard has also been updated to provide analysis of the annual capital financing budget. Actual capital financing expenditure is forecast to be £1m underspent by the year end.

            Forecast Reserves Position

3.9       The balance of general reserves is forecast to be £13.90m, after providing for the agreed cash flow funding of £790k.

3.10      Specified reserves are forecast to be underspent by £135k by the year end and this has been included in the available balance in Table 1 above.

            Treasury Management Report

3.11      The Quarter 2 treasury management report is included as Appendix 2.

3.12      Financial & Resource Implications

            The Departmental position at Quarter 2 together with the forecast year end Council position is detailed within the report. Given the shortfall in available balances to meet the rates  clawback and Primark commitments, it is recommended that no further reallocations are considered until the year end position is considered by the Committee in June 2019. 

            Members are also asked to note that there will be further non-recurrent financing requirements in relation to holiday pay back payments and resources for the customer focus programme. Further reports will be brought to the Committee when the requirements have been determined.

3.13      Equality or Good Relations Implications/Rural Needs Assessment

            None.”

            The Committee adopted the recommendations and agreed also that no further cash flow requests be considered until after the current financial year.