Issue - decisions
Balance Sheet Management
A report by the Interim Director of Finance specified the level of General Fund balances the Council maintained. It also set out the approach that had been used to determine this level and suggested an approach to replenish the Council’s General Fund balances.
A risk assessment had been drawn up of the cost and demand pressures on budgets, insurance liabilities, the achievement of budget savings, and other financial uncertainties which supported the proposed level of balances of approximately £12.5 million for 2012/13. This assessment was set out in Appendix 1 to the report and Appendix 2 contained earmarked reserves to be released.
The Council had, and was facing, funding reductions at a time when the demand for its services, due to population changes and the economy, was increasing. The current projected revenue forecast for the year, at Month 6 (to end September 2012), showed a potential General Fund overspend of £13.2 million.
Councillor Phil Davies informed the Cabinet that it was prudent to ensure that there were balances available to deal with the risks identified.
(1) the Cabinet agrees:
(a) the level of General Fund balances recommended is based on a locally determined approach to the assessment of the financial risks the Council may face in the future;
(b) the Council maintains its level of balances at or above the locally determined level of General Fund balances;
(c) the transfer of £10.5 million of earmarked reserves to the General Fund balances; and
(d) the transfer of £2 million of earmarked reserves to enable the creation of an Efficiency Investment Rolling Fund.
(2) the Cabinet notes that, due to the potential £13.2 million in year overspend faced by this Council, caused in the main by unprecedented cuts in grant from the Coalition Government, all non essential spending has been frozen;
(3) the Cabinet has already released £220,000 of funding for local road safety initiatives following a successful bid to the Local Sustainable Transport Fund;
(4) in spite of continuing budget pressures, given clear local need, the Cabinet agrees to the immediate release of £330,000 for Area Forums (£30,000 per Forum) for the support of local Community and Voluntary Group projects;
(5) given the urgency of allocating this resource, the Cabinet instructs Officers to meet with Local Ward Members to consider bids that have been submitted, and make recommendations on how this funding should be allocated. Whilst these recommendations are a matter for Ward Members, the Cabinet urges Members to consider prioritising bids that seek to assist the most vulnerable and to support community groups who are most in need; and
(6) the Cabinet also notes that the Chief Executive is currently consulting with residents and staff regarding the future of Area Forum funding and requests that funding for future years be considered in the light of the consultation findings.