Agenda item

Service & Financial Planning Report - 2018/19 Outturn Report and 2019/20 Update

Cllr L D Carter


Key Decision identified as 2018/19 Outturn Report and Initial Trends for 2019/20 in the Notice of Key Decisions published on 26 April 2019.


Councillor L D Carter, Cabinet Member for Finance, Commercial Services and the Economy presented the report of the Assistant Director: Finance & Human Resources, Chief Finance Officer.


Cabinet Members noted that despite some areas of significant pressure, the Council had ended the year in a positive financial position, which assisted the in the 2019/20 management of the budget and allowed a number of one-off investments in key areas to make the borough a better place to live, work, learn, visit and do business in.  Going forward this was expected to result in a more sustainable financial strategy.    


The gross revenue budget for 2018/19 was £428m and the net budget was £121m.  The revenue outturn position was within budget with a final net underspend of £0.275m (which was equivalent to only -0.23% of net budget) after the proposed transfers to reserves and balances had been made.  This position had been achieved after delivering £7.6m of budget savings in 2018/19, on top of the £110m made in the previous 9 years giving a total of £117m - equivalent to around £1,500pa for every home in the Borough.


The funding outlook for the medium term was very uncertain with significant changes to the local government finance system due to be implemented from April 2019, however, there was very little information available about what the impact of the changes would be on the Council.  Using the limited information that was available, it was anticipated that the Council would need to identify around £30m of further savings over the next three years on top of the £117m already delivered to the end of 2018/19. 


Due to the strong financial management during 2018/19, the Council had been able to create a number of provisions from the 2018/19 outturn position to support its priorities and sustain its financial position going forward. A number of favourable variations had also been secured during the year which contributed to the overall positive position. These were noted by Cabinet Members as outlined in the report.


The key areas of pressures during 2018/19 were noted. It was reported that:-


Children’s Safeguarding & Early Help ended the year with a service overspend of £3.1m.  Spend during the year was higher than the budget at there was an increasing number of more expensive specialist placements for looked after children with complex and severe behaviours or emotional health needs over the course of the year.   The Council had invested additional funding of £4.893m into the Children’s Safeguarding & Family Support budget over the next year highlighting the very high priority placed by the Council on safeguarding children.  A cost improvement plan was in place which was monitored on a regular basis by senior managers and Cabinet Members.


Adult Social Care ended the year with a service overspend of £0.379m.  As reported throughout the year, the cost of purchasing care packages from external providers and high demand led to a pressure of £4.3m.  This was mitigated by additional income totalling £4.4m from grant funding, CCG funding and client contributions.  As part of the 2018/19 budget strategy, the Council had committed additional investment totalling £0.65m into the Adult Social Care budget over the next three years.  The Service also had a Cost Improvement Plan in place to deliver better outcomes and efficiencies


The Capital Outturn position 2018/19 was noted; capital spend ended the year at £57.6m against an approved estimate of £71.7m which was in the main due to re-phasing expenditure into 2019/20.  This underspend would result in some further treasury management savings in 2019/20.


The Income monitoring position was noted; overall cash collection was good with over £15m more cash collected than in the previous year.  The collection rates for Business Rates were ahead of the target for the year although Council Tax collection and Sales Ledger was very slightly behind target.  All debt had been pursued rigorously and continued to be collected after the end of the financial year with all appropriate recovery avenues being pursued.


It was noted that 2018/19 was the fourth year of operation for NuPlace Ltd, the Council’s wholly owned housing investment company.  NuPlace was a separate legal entity and as such prepared its own accounts but as NuPlace was wholly owned by the Council, consolidated group accounts were also prepared.  The unaudited accounts showed that NuPlace had generated an operating profit before taxation of £0.492m in 2018/19 but as expected no dividend was distributed.  The Council also received income from NuPlace totalling £1.2m during 2018/19 net of additional interest and other marginal costs.


It was reported that the draft formal statement of accounts would be considered at the Audit committee on 30 May 2019 and would be audited by Grant Thornton, the Council’s external auditors, during June and July.  The accounts would also be available for public inspection for 30 working days from 31 May 2019.  Summaries of the outturn on revenue and capital along with major variations were shown as appendices to the report. 


It was noted that in 2019/20, the Council faced another very challenging year. A number of key issues had been highlighted in the first high level review of the budget position.   Once the final accounts were completed more detailed monitoring would take place and a further more detailed report would be presented at the July meeting of the Cabinet with an updated position. 


Cabinet Members welcomed the continued position of strength of the Council, despite one off costs and applauded the efforts of all Council teams delivering over services to the people of Telford & Wrekin.




(a)  the Revenue outturn position for 2018/19 and related virements in Appendix 3 of the report which is subject to audit by the Council’s external auditors be approved;


(b)  the transfers to reserves and associated approval to the relevant Assistant Directors to spend the reserves detailed in section 5 of the report be approved;


(c)  the Capital outturn position and related supplementary estimates, re-phasing and virements shown in Appendix 4 of the report and as summarised in the report be approved; 


(d)  that delegated authority be granted to the Assistant Director: Finance & HR to make any minor changes required as the outturn is finalised, in consultation with the Cabinet Member for Finance, Commercial Services and the Economy;


(e)  the performance against income targets be noted; and


(f)   the key issues identified for 2019/20 be noted.

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