Issue - meetings

Portfolio Holder – Councillor Martin Cook

This report gives details of the forecast outturn position for 2024/25 for:

1.    The General Fund Revenue Budget, General Balances, and the Council’s Reserves.

2.    The Housing Revenue Account.

3.    The Shared Revenues Partnership.

4.    The Capital Programme, for this and future years.

5.    Treasury Management.

103.1. Councillor M Cook introduced the report noting that there was an adverse variance on the General Fund against the 2024/25 budget, but the Housing Revenue Account and SRP were forecasting a better than budget year-end position. Councillor Cook highlighted the decline in Government funding in Chart 1 and the challenges for councils from a decade of austerity, with a cumulative loss of income of £119million, and the need to identify savings to cover the gap in funding. Section 12 of the report indicated a greater accuracy in the forecasting of capital spend.

103.2. Councillor Cook highlighted the proposed write offs in Section 19 of the report that were primarily as a result of businesses using loopholes in the law to avoid paying business rates, which was a nationwide issue for councils. Bolton Council had taken legal proceedings against one of the companies, 3^rd Sector Assist Limited, only to precipitate the winding up of that company, highlighting that taking action could incur additional cost with no guarantee of recovering the debt. Councillor Cook added that it was necessary for financial accounting purposes to write off debts when it was unlikely that the debt could be recovered; however, the debt could be written back on if circumstances changed and there was an opportunity to recover it. The proposed write offs totalled over £700k, with the Council liable for 40% and the remaining debt shared between SCC and Central Government. The volatile nature of business rate collection emphasised the need for reserves within the Medium Term Financial Plan to cover major unexpected variances.

103.3. Councillor Fisher commented that the biggest change in the General Fund position this quarter seemed to be attributed to capital financing costs and asked if this linked to the loans recently taken out.
The Section 151 Officer, Ian Blofield, confirmed that the change was mainly related to capital financing charges; the Council borrowed at threshold levels and pooled resources rather than linking the funding to individual capital projects to ensure that the Council did not borrow more than it needed. Where large investments were required, this would increase the need for additional borrowing.

103.4. Councillor Fisher asked whether the anticipated capital receipts would cover all of the 2 year loan or just the interest costs. Councillor Fisher noted from the General Fund summary and Liability Benchmark graph that there appeared to be a funding gap of £60-80million over the next 3-4 years and so further loans would be required, and asked whether this would require the sale of further capital assets to cover the loan interest costs.

103.5. The Section 151 Officer commented that the Medium Term Financial Plan set out the predicted investment needs and anticipated use of capital receipts, and there were adequate resources to repay the anticipated level of debt. The Liability Benchmark graph indicated that this was a viable financial situation and as many of the loans taken out by the Council were annuity loans, with the principal investment being paid back as  ...  view the full minutes text for item 103