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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 27/06/2006
ANNUAL ACCOUNTS 2005/2006 OVERALL REVENUE OUTTURN
(GENERAL FUND AND HOUSING REVENUE ACCOUNT)



Summary & Purpose
This report provides a summary of the 2005/06 General Fund revenue outturn and the 2005/06 revenue outturn for the Housing Revenue Account. The Statement of Accounts, which contains the detailed figures in a format compliant with Audit requirements is presented for approval as a separate report on this Agenda.

APPENDIX E.1
Waverley Borough Council

EXECUTIVE – 27TH jUNE 2006
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Title:
ANNUAL ACCOUNTS 2005/2006
OVERALL REVENUE OUTTURN
(GENERAL FUND AND HOUSING REVENUE ACCOUNT)
[Wards Affected: N/A]
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Summary and purpose:

This report provides a summary of the 2005/06 General Fund revenue outturn and the 2005/06 revenue outturn for the Housing Revenue Account. The Statement of Accounts, which contains the detailed figures in a format compliant with Audit requirements is presented for approval as a separate report on this Agenda.
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Environmental implications:

There are no direct environmental implications as a result of the recommendation of this report. However, the outturn includes services that have very significant positive environmental benefits.

Social / community implications:

There are no direct social/community implications as a result of the recommendation of this report. However, the outturn includes services that do have very significant positive social/community benefits.

E-Government implications:

The outturn contains budgets to enable the delivery of Waverley’s E-Government Strategy.

Resource and legal implications:

There are no direct legal implications as a result of the recommendation of this report. Resource implications are contained throughout the report.
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Introduction

1. This report provides a summary of the 2005/06 General Fund and Housing Revenue Account (HRA) revenue outturn position together with a table detailing the major variations from the estimate. This report is the final budget report for the year and builds on the position previously reported to Members through budget monitoring.

2. In certain areas, where expenditure was delayed due to particular circumstances but the service requirement remains, carry forward of the budget provision into 2006/07 has been requested.

3. This report contains the following Annexes: Annexe 1 The General Fund Revenue Summary
Annexe 2 The main differences from the approved 2005/06 GF Budget
Annexe 3 The Housing Revenue Account summary
Annexe 4 Detail of the main differences from the approved HRA Budget
Annexe 5 Revenue carry forward requested from 2005/06 to 2006/07

General Fund

2005/06 Revenue Outturn

4. The General Fund Outturn position for 2005/06 shows a continued improvement to the financial position, in line with previous Budget Monitoring reports. 5. At the Executive on 7th March 2006, Budget Monitoring to the end of January identified a net underspend against the 2005/06 budget of 367,300. The actual underspend for 2005/06 is 564,371. The table at Annexe 2 compares the underspend reported to the end of January to the underspend identified at outturn for 2005/06. The differences contributing to the increase of some 197,000 are analysed at Annexe 2, and in the main reflect a continued improvement in areas identified previously. Particular mention should be made of Development Control income, where a late surge in applications resulted in an improvement of 46,000 to the position reported at Budget Monitoring. Other budget underspends have arisen in the areas of Recreational Open Space, Licensing, Information Technology, income from General Fund Properties, Community Care income and Waverley Training Services income.

6. The Outturn figures include expenditure of 228,750 covered by supplementary estimates and approvals to spend from balances pending future savings regarding alternate weekly collection implementation costs. The figures also include expenditure covered by 95,250 carried forward from 2004/05.

7. The original Budget for 2005/06 did not include a contribution from the General Fund working balance. As a result of the underspend in 2005/06, 461,181 will now be contributed to the working balance

8. The use of the Revenue Reserve Fund is budgeted at 320,000, with a further 330,000 by way of abatement of capital repayments made from the General Fund. These transfers have taken place as budgeted. 9. The following table illustrates the extent of the General Fund underspend on 2005/2006 budgets:
Housing Benefit Subsidy

10. As reported to Committees in January, in 2004/05 the Government made changes to the Housing Benefit Subsidy system and began to reimburse Local Authorities effectively for 100% of their expenditure as a specific grant, rather than in part through the Revenue Support Grant. However, subsidy claims are made on the basis of the gross expenditure in the benefits system, which can differ substantially from the amount passed to the financial accounts as this excludes overpayments. It is therefore possible for subsidy recovered to amount to more than 100% of the cost shown in the financial accounts. The volume of Housing Benefits paid by Waverley is extremely large (in excess of 20 million) and so even a very low change in the effective subsidy rate can result in a substantial net amount. 11. For 2004/5, prior-year adjustments relating to Housing Benefits amount to 325,778, which is very close to the figure of 330,000 reported at Budget Monitoring. Whilst an ongoing revenue effect is likely, a degree of caution is necessary as the subsidy system is subject to frequent change. Therefore, Council agreed not to take the benefit of this extra resource into the main revenue account as this would create a dependency, but instead to treat it separately on an annual basis. 12. For 2005/2006, the potential underspend relating to Housing Benefits is 177,500, and the Director of Finance considers it reasonable to close the accounts on this basis. This figure includes the benefits to war widows and will be subject to Audit certification later in the year. General Fund Summary 13. The following table shows the effect of the Housing Benefit adjustments combined with the General Fund underspend in the year: General Fund Balances 14. After taking account of supplementary estimates and carry forward adjustments between years the General Fund Working Balance will increase by some 744,000, from 1,451,420 at 1st April 2005 to 2,195,069 at 31st March 2006.

Effect on 2006/2007 Budget

15. An assessment has been carried out on the probable effect of the trends revealed by the 2005/2006 underspend on the 2006/2007 Budget. This amounts to an improvement of 110,000. The analysis of the figure and explanation of how it has been arrived at is given at Annexe 2. A similar exercise was carried out within the previous Budget Monitoring report; and this showed the effect to be minimal, because most of the change had been picked up during the 2006/2007 Budget setting process. The current projection of 110,000 reflects subsequent improvements.

Housing Revenue Account (HRA)

16. This account identifies the cost of providing, managing and repairing the Council’s housing stock of some 5,100 dwellings in 2005/06. Overview

17. In total the position on the HRA at the end of 2005/06 is to increase the working balance by 211,600 whilst 100,000 has been used from the repairs fund balance. Budget monitoring to the end of January 2006 identified potential net savings of 188,500 compared with the outturn of 252,440. There have, however, been some significant variations within these figures, most notably the required treatment of demolition costs met from the repairs revenue account and the reduction in negative housing subsidy both for 2004/05 and anticipated for 2005/06. The full list of major variations is identified at Annexe 4.

18. The improved working balance will give the HRA more stability for 2006/07 whilst the landlord service and all aspects of service delivery are undergoing a thorough review. Savings will still need to be achieved in order that the service remains viable and, particularly, so that a programme of external decorations can be supported.

General HRA Working Balance

19. The expected outturn of all transactions within the Housing Revenue Account in the year will result in a net contribution to balances of 111,600. This restores the HRA working balance to just over 1.2m, which is in accordance with The Director of Finance’s recommendations and considered prudent for stock of the size owned by Waverley.

Recommendation

It is recommended that

1. the outturn position for 2005/06 be noted; and

2. the revenue carry forwards of 43,310 on the General Fund from 2005/06 to 2006/07, as shown at Annexe 5, be approved.

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Background Papers (DoF)

There are no background papers (as defined by Section 100D(5) of the Local Government Act 1972) relating to this report.

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CONTACT OFFICERS:

Name: Brian Long Telephone: 01483 523253
Glennis Pope 01483 523252


E-mail: blong@waverley.gov.uk
gpope@waverley.gov.uk

comms/exec/2006-07/061