Agenda item

Financial Review 2018/19 - April to September

To consider Report CFO/073/18 of the Treasurer, concerning the financial position, revenue and capital, for the Authority for 2018/19. The Authority receives regular comprehensive financial reviews during the year, which provide a full health check on the Authority’s finances. This report covers the period April to September 2018.

 

 

Minutes:

Members considered report CFO/073/18 of the Treasurer, concerning the financial position, revenue and capital, for the Authority for 2018/19.  The Authority receives regular comprehensive financial reviews during the year which provide a full health check on the Authority’s finances. This report covers the period April to September 2018.

 

Members were provided with a detailed overview of the report, which covered revenue and capital spend, the Authority’s reserves; and a review of the treasury management performance against the approved strategy.

 

With regards to the revenue budget and spend, which outlines the position in relation to day to day activity, Members were informed that it remains consistent with the approved original budget; and that the Authority is on target to deliver the approved revenue savings options. However, they were also informed that until the station merger projects at Saughall Massie and St. Helens have been completed, some of the required structural changes cannot be formally implemented, although in cash terms, employee savings are being delivered as firefighter retirements remain consistent with those anticipated; and the required duty system changes have been implemented.

Members were also advised that although the revenue spend is anticipated to be consistent with the budget, officers will continue to try and deliver saving options at the earliest point, in order to deliver one-off savings in the year.

 

In relation to the Capital Programme and spend, which outlines the current planned investment in our assets and spend to date, Members were informed of the amendments to the approved capital programme of an additional £2.946m, of which £2.45m relates to the approved increase in the new St. Helens community fire station scheme. They were also advised that Appendices B and C to the report, outline the latest planned capital spend.

 

In terms of reserves, Members were advised that £0.474m of reserves had been utilised within the reporting period, of which £0.325m was used to fund approved additional works on the Formby LLAR building.

Members were also informed that Appendix D outlines the purpose of each reserve and its planned use. In addition, paragraph 20 of the report summarises the movement on the overall level of reserves since reserves reached their peak value at the end of 2016/17, which shows an approximate 20% reduction in the value of reserves by the end of Quarter 2.

 

In terms of a review of the treasury management performance against the approved strategy, which considers any borrowing, investments and management of cash, Members were informed that performance was consistent with the approved strategy for 2018/19. It was confirmed that no new loans had been taken out in the year to date; and as at the end of September, the Authority held £42.6m of investments. It was highlighted however, that this included a firefighter’s pension grant of £27.3m received in July, which will be utilised this year. [HJ(1] [HJ(2] [HJ(3] 

 

Members commented that they were very happy with the report and requested that their thanks be recorded to officers.

Comments were made by Members with regards to the presentation of information within the report, particularly in relation to reserves. It was suggested that information regarding the Authority’s reserves, be separated into two distinct tables; one showing the level of “general” reserves and the other outlining “committed” reserves. It was also suggested that the term “committed reserves” be used, rather than “earmarked reserves”

 

Officers confirmed that these requests would be actioned; and it was suggested that it may be worthwhile including information within the table to state when it was planned to use the reserves.

 

With regards to the use of reserves, Members attention was drawn to paragraphs 20 to 22 of the report. They were informed that arguments have been put forward by Ministers, stating that MFRA cannot be stretched if they have been able to increase their level of reserves. However paragraph 20 clearly shows that the trend of increasing reserves has now been reversed, with the level of reserves anticipated to drop below £5m by the end of 20121/2022.

 

Members Resolved that:

 

a)    The contents of the report, be noted.

 

b)    The Treasurer be instructed to continue to work with budget managers to maximise savings in 2018/19.

 

c)    The amendments to the capital programme, be approved.

 

d)    The current planned use of approved reserves, be noted.

 

e)    For future reports, the term “earmarked reserves” be amended to “committed reserves”.

 

f)     For future reports, information regarding reserves be separated into “general reserves” and “committed reserves”, for clarity.

 


 [HJ(1]

 [HJ(2]I am not sure that this level of detail is necessary but will be guided by Ian

 [HJ(3]I agree

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