Agenda item - Targeted Budget Management (TBM) Provisional Outturn 2012/13

Extract from the proceedings of the Policy & Resources Committee meeting held on the 13^th June 2013, together with a report of the Executive Director for Finance & Resources (copies attached).

13.1         The Committee considered a report of the Executive Director of Finance & Resources in relation to the Targeted Budget Management (TBM) Provisional Outturn 2012/13. Targeted Budget Monitoring (TBM) reports were a key component of the Council’s overall performance monitoring and control framework. TBM reports are periodically presented to Policy & Resources Committee and are subsequently provided to the next available Audit & Standards Committee for information and consideration in the context of the Committee’s oversight role in respect of financial governance and risk management.  The TBM report set out the provisional outturn position on the Council’s revenue and capital budgets for the financial year 2012/13. The provisional position has since been confirmed and was now fully reflected in the annual financial statements for 2012/13 also reported to the Committee.

13.2         Councillor Wealls asked about the items for carrying-forward to the next financial year, and in response the Executive Director of Finance & Resources noted that the carry-forwards were assumed to have been agreed in this report, and if they were not agreed then the underspend would be higher. In general terms there were set reasons when carry-forwards were allowed; most of these were in relation to projects that spanned the financial year and in relation to Government grants that paid out late in projects and schemes. It was also noted that it was important to ensure restricting carry-forwards did not provide an incentive for poor financial management, and it was necessary to ensure that those services that were able to deliver under spends were properly credited. It was also added that the underspend money was allocated in the budget, and had commitments made against it.

13.3         Councillor Sykes asked about the value for money (VFM) programme; in particular if this was providing incentives for the Council, and allowing investment for more savings. In response the Executive Director explained that the Council had enough cash to allow people to borrow to invest where there was a good business case – for example at the Brighton Centre. The Council now had to look at more challenging schemes such at Hove Town Hall, but wanted to ensure there was a strong message that the Council could finance good cashable paybacks.

13.4         Councillor Wealls asked for clarification in relation to capital financing costs due to reduced Housing Revenue Account (HRA) borrowing. In response the Executive Director explained that this related to the introduction of self-financing HRA from 2012; when setting the 2012/13 budget the Council had to make an assumption about the relative debt of the HRA account against the general fund and how this split would work. At the time the HRA account had not borrowed as much as was anticipated. The HRA self-financing had actually made the Council better in terms of financial resilience, and the report showed that the estimate of the level of the split had not been judged quite right.

13.5         RESOLVED – That the Committee note the report to the Policy & Resources Committee on 13 June 2013 (Appendix 1) and the subsequent recommendations and resolution.