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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 12/06/2007
ANNUAL ACCOUNTS 2006/2007 - OVERALL REVENUE OUTTURN
(GENERAL FUND and HOUSING REVENUE ACCOUNT)


Summary & Purpose
This report provides a summary of the 2006/07 General Fund revenue outturn and the 2006/07 revenue outturn for the Housing Revenue Account. The Statement of Accounts, which contains the detailed figures in a format compliant with Audit requirements will be presented for approval by the Audit Committee on 26th June 2007.
APPENDIX B.1.
Waverley Borough Council

EXECUTIVE - 12TH jUNE 2007

Title:
ANNUAL ACCOUNTS 2006/2007
OVERALL REVENUE OUTTURN
(GENERAL FUND and HOUSING REVENUE ACCOUNT)
[Wards Affected: All]

Summary and purpose:

This report provides a summary of the 2006/07 General Fund revenue outturn and the 2006/07 revenue outturn for the Housing Revenue Account. The Statement of Accounts, which contains the detailed figures in a format compliant with Audit requirements will be presented for approval by the Audit Committee on 26th June 2007.

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.

Introduction

1. This report provides a summary of the 2006/07 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 2007/08 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 2006/07 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 2006/07 to 2007/08
· Annexe 6 2007//08 General Fund Budget Update / Projections
· Annexe 7 General Fund Balance Projections
· Annexe 8 Revenue Reserve Fund Projections
· Annexe 9 HRA Balance Projections. General Fund

2006/07 Revenue Outturn

4. The General Fund Outturn position for 2006/07 shows a continued improvement to the financial position, in line with previous Budget Monitoring reports. 5. At Executive on 7th March 2006, Budget Monitoring to the end of January identified a net underspend against the 2006/07 Budget of approximately £725,000. The actual underspend for 2006/07 is £836,870. The table at Annexe 2 compares the underspend reported to the end of January with the Outturn position. The differences contributing to the increase of some £112,000 are analysed at Annexe 2, and in the main reflect a continued improvement in areas identified previously. The most significant changes are additional interest of £60,000, a year-end accounting adjustment of £40,000 on Environmental Cleaning, further improvements of £63,000 at Godalming Leisure Centre and further savings of £25,000 within the Recreational Open Space budget. An increase of £60,000 in the overspend within the Development Control budget, has partially offset some of these savings.

6. The Outturn figures include expenditure of £315,500 covered by supplementary estimates and also include expenditure covered by £43,310 carried forward from 2005/06.

7. The original Budget for 2006/07 included a contribution from the General Fund working balance of £100,000. As a result of the underspend, £522,270 will instead be contributed to the working balance

8. The use of the Revenue Reserve Fund is budgeted at £250,000, 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 2006/2007 budgets:


General Fund Balances 10. After taking account of supplementary estimates, carry forward adjustments between years and a small prior-year adjustment of £4,576 representing an increase in Government Grant received, the General Fund Working Balance will increase by some £383,000, from £2,238,379 at 1st April 2006 to £2,621,015 at 31st March 2007.

Effect on 2007/2008 Budget

11. An assessment has been carried out on the probable effect of the trends revealed by the 2006/2007 underspend on the 2007/2008 Budget. This amounts to an improvement of some £200,000. 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 2007/2008 Budget setting process. The current projection of £200,000 reflects subsequent improvements, of which the most significant is additional interest.

Updated 2007/2008 Budget Position

12. An indication of the latest Budget position for 2007/08 is shown at Annexe 6. This includes the Supplementary Estimate for urgent works at Undershaw Hotel already approved, together with estimated figures for further budgetary requirements. The ongoing effect of the outturn figures as described in the above paragraph has also been taken into account. It is emphasised that the figures have been produced by the Accountancy Section in order to give a realistic indication of the likely overall Budget position and should not be regarded as seeking endorsement or approval. Where appropriate, detailed reports on specific areas will be submitted by the relevant departments for consideration in due course. The first comprehensive budget monitoring report for 2007/08 will be presented to the Executive on 4th September. 13. Updated Financial Strategy projections for the General Fund working balance are shown at Annexe 7.

14. Updated Financial Strategy projections for the Revenue Reserve Fund are shown at Annexe 8.

Housing Revenue Account (HRA)

15. This account identifies the cost of providing, managing and repairing the Council’s housing stock of some 5,000 dwellings in 2006/07. Overview

16. In total, the position on the HRA at the end of 2006/07 is to increase the working balance by £79,298 whilst £615,000 has been added to the repairs fund balance due to a significant repairs underspend in the year. Budget monitoring to the end of January 2007 identified potential net savings of £380,000 compared with the outturn of £694,000. There are a number of reasons why the revenue repairs budget was not spent:

· Some £300k additional funding was made available for expected increased demand for essential responsive repairs. This demand has not yet materialised.
· There was no sustained harsh winter weather that often triggers increased demand for particular types of repair.
· There is currently a backlog of fencing work, required on health and safety grounds, which cannot be carried out due to a national shortage of materials.
· Revenue carry forward of £90,000 is requested to complete 2006/07 contractual commitments.
· The full list of major variations is identified at Annexe 4 17. A change of accounting practice has resulted in the budgeted amount for voluntary minimum revenue provision (MRP) not being charged in the year. The detailed guidance notes issued in March 2007, that support the Statement of Recommended Practice, make it clear that it is no longer appropriate to charge this to the HRA unless new unsupported borrowing is undertaken. This accounts for £70,000 of the HRA underspend.

18. The increased repairs fund balance may be used to help fund a sustained level of spend over the next few years. The responsive repairs budget has actually been reduced for 2007/08 and, whilst money is included in the cyclical budget for external decorations and associated work in 2007/08, there is no certainty that this extra funding can continue to be made available. The repairs fund balance could possibly help support such work beyond 2007/08.

General HRA Working Balance

19. The working balance stands at just over £1.3m as a result of the change explained at para. 17 above. This maintains the HRA working balance at a level that is in accordance with The Director of Finance’s recommendations and considered prudent for stock of the size owned by Waverley. Projections for the HRA working balance are shown at Annexe 9.

Recommendation

It is recommended that:

1. the outturn position for 2006/07 be noted;

2. revenue carry forwards of £144,210 on the General Fund and £90,000 on the HRA from 2006/07 to 2007/08 as shown at Annexe 5 be approved; and

3. the initial General Fund Budget update for 2007/08 at Annexe 6 be noted.

Background Papers (DoF)

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

CONTACT OFFICERS:

Name: Brian Long Telephone: 01483 523253
E-mail: blong@waverley.gov.uk


Name: Glennis Pope Telephone: 01483 523252
E-mail: gpope@waverley.gov.uk

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