Agenda item

Context:

To receive information on the revenue and capital outturn position of the Authority at the end of reporting period 1 which represents the financial outturn position for the 2018/19 financial year based on May inclusive activities.

Recommendations proposed to Cabinet:

·         That Members consider a net revenue forecast of £471,000 overspend.

·         Members consider a capital outturn spend of £35.7m, which accords with budget provision for the year, after proposed slippage of £75,000.  This describes a breakeven position not uncommon for this early in the year, although there is a potential for additional 21^st Century schools costs in respect of additional asbestos removal and treatment costs not anticipated, which could be the order of £350,000.

·         Consider the use of reserves proposed in para 3.8.1 of the report.

·         Members note that the low level of earmarked reserves will notably reduce the flexibility the Council has in meeting the challenges of scarce resources, going forward.

·         Members note the extent of movements in individual budgeted draws on school balances, and acknowledge a reported net forecast deficit of £622,000 resulting, and support the amendments to Monmouthshire County Council’s Fairer Funding Regulations, as described in para 3.8.13 of the report, for onward engagement with schools forum and governing bodies.

Member Scrutiny:

·         In response to a Select Committee Member’s question regarding risks to the Council in respect of capital receipts, it was noted that the risk lies predominantly around the future schools capital programme. From a cost of £40 million, £30 million will be paid for via capital receipts and £10 million paid for via borrowing. At the time of this decision being made, the Authority would not have had £30 million receipts in the bank.  However, the nature of capital receipts is that they can be progressed over a prolonged period.  The risk to the Council is felt in the way of interest payments in terms of temporary borrowing that is required to offset that. The vast majority of the capital receipts have been received.

·         It is critical that the Authority continues to move forward at pace with regard to the review of its procurement procedures.

·         The Select Committee will receive an update report in November 2018 regarding the Alternative Delivery Model containing details of all final documents appertaining to the enactment of MonLife and MonLife Plus. 

·         In response to a Select Committee Member’s question regarding County Council input with regard to financial matters of MonLife, it was noted that it will depend on how the organisation crafts its management agreement with MonLife.  We are not yet at this stage of the process to identify the operational activities. The Authority will continue to have a role in MonLife in its capacity as a subsidiary part of the Council. Under a service level agreement, it is likely that a County Council accountant will be moved across to MonLife via the TUPE process.

·         Teckel company accounts need to be reported to the Authority.

·         With regard to MonLife, the accounting will be monitored and managed by the Board and the Board of Trustees.  However, there will be requirements for this to be reported within the Council arrangements on an annual basis.  These could also be reported on a quarterly or six monthly basis, if required.

·         We will need to understand the relationship between the Authority and the charity, i.e., value for money, and are the objectives that have been established being delivered and can this be clearly monitored.

·         A workshop is required to aid Members in understanding the processes required in establishing the Alternative Delivery Model and to provide clarity, going forward.