COUNTY COUNCIL 13 SEPTEMBER 2001

REPORT OF THE

POLICY AND RESOURCES COMMITTEE

PART I

FINAL ACCOUNTS 2000/01

1 The Committee has approved the final accounts of the County Council for the year ending 31 March 2001. The draft statutory Statement of Accounts giving full details is circulated separately to each Member of the Council and under the new constitutional arrangements needs to be approved by the Council at this meeting. The Cabinet will be considering this matter at its meeting on 11 September and its comments will be reported to Council; in the meantime a copy of the Cabinet report is enclosed for Members' information. Some of the significant features of the accounts are described in the following paragraphs.

Cash Limited Expenditure of Committees and Total Expenditure

2 Total cash limited expenditure of Committees (summarised in Appendix 1) was £1.4m above the revised estimate. This represents 0.2% of Committee spending and the Policy and Resources Committee is satisfied at this close level of budgetary control.

3 The main area of Committee overspending occurred as a result of the pressures on Social Services, in common with the experience of the majority of authorities nationally. The budget strategy provided for an overspend of up to £1.5m on Social Services. The sum of £725,000 was added to the 2001/02 budget to write off the Social Services overspend brought forward from 1999/00. Earlier this year the County Council agreed that the pressures on Social Services in 2001/02 be reviewed in July 2001 when final accounts were approved with the aim of releasing the remaining £775,000 at that stage subject to a number of caveats. In June the Social Services Committee reviewed the achievement of their targets as part of its own report on the final accounts. Progress had been made and subject to monitoring and review during 2001/02, the Policy and Resources Committee has agreed that the balance now remaining of £765,000 be written off. The Environment, and Recreation and Heritage, Committees were also overspent, the former by £257,000 chiefly as a result of additional highways maintenance expenditure in responding to flood damage, and the latter by £27,000 mainly due to the shortfall of income and extra spending arising from the foot and mouth crisis. The Committee has agreed to carry forward the net overspending in respect of the Environment Committee and meet it by the increased resources in 2001/02, and to write off the Recreation and Heritage overspending.

Use of Underspendings

4 The Committee's normal policy is automatically to return 50% of unplanned savings to committees during the current year and consider the use of the balance for corporate purposes. Given the pressures from foot and mouth and flood damage which were reflected in amounts set aside in the 2001/02 budget and further required with the closure of accounts, the policy has been confirmed.

Other Budgets

5 The Council's net expenditure on other budgets was £1,446,000 below the revised estimate and a summary is included at Appendix 2.

Revenue Contributions to capital/contribution to capital reserve

6 The level of revenue contributions to capital required to finance capital payments in 2000/01 depended upon variations in capital receipts and payments. Borrowing approval and capital receipts are first applied to finance capital payments with the rest met by revenue contributions. The balance remaining on budgeted revenue contributions is applied to the capital reserve to finance future payments. In 2000/01 capital receipts were more than expected and capital payments slipped into 2001/02. As a consequence a budgeted withdrawal from the capital reserve was not needed and an overall saving of £5.3m on revenue contributions has instead been transferred to the capital reserve.

Additional spending in 2001/02

7 The underspending on other budgets provided scope for investment on one-off pressures totalling £1.3m as set out in Appendix 3.
Overall Summary

8 The overall effect of the outturn and new proposals, after adjusting for the additional write off of the Social Services overspending, was a net reduction in balances of £458,000 as set out in Appendix 4.

General Balances

9 Budgeted balances at 31 March 2001 stood at £8.5m. The 2001/02 budget was partly financed by a planned withdrawal from balances of £2m of which £1.5m was to meet continuing spending. The net reduction in balances of (round figures) £0.5m is slightly lower than anticipated when setting the 2001/02 budget. This results in forecast balances at 31 March 2002 being £6m. The minimum prudent level of balances has been set at £5.7m, but there remain further, as yet unquantified or unspecified, pressures in 2001/02. In addition, the writing off of all the £1.5m overspend on Social Services from 2000/01 as referred to previously in this report, has left no scope for balances to be used in 2002/03 to replace in turn those balances which were utilised in 2001/02 to fund continuing spending. The current funding gap for 2002/03 is therefore at least £1.2m and balances will need to be replaced by this amount over the remainder of 2001/02. Proposals for appropriate action will be reported to Cabinet and Council as various issues such as the level of Government grant settlement, impending changes in legislation etc. crystallise.

Treasury Management

10 The Committee has also approved the County Treasurer's annual report on the administration and management of the County Council's borrowing, debt and investments.

Capital Spending and Financing 2000/01

11 The Committee has reviewed capital spending and financing in 2000/01. Capital payments amounted to £65.3m, some £6.6m less than estimated due to a slippage in payments into 2001/02.

12 Capital receipts amounted to £15.3m. This was £2.7m more than was estimated due to some sales allowed for in the 2001/02 budget being completed sooner than expected. Capital receipts in 2001/02 will therefore be correspondingly lower. All of the receipts can be used to finance new capital expenditure.

13 The County Council's debt outstanding on 31 March 2001 was £276.0m. The net increase in borrowing for the year was £12.3m. Appendix 5 shows the extent to which each Committee's capital programme was achieved in 2000/01. The record of payments for each Committee and the nature of those payments is shown in Appendix 6. Sources of finance are shown in Appendix 7 and trends in outstanding debt in Appendix 8.

14 In addition to the £33.03m of schemes reported at the previous meeting of the Council, the Committee has agreed to carry forward further capital schemes totalling £984,000 into 2001/02.

RECOMMENDATION

That the draft 2000/01 Statement of Account as set out in the document circulated separately be approved subject to any further comments by Cabinet.

T.K. THORNBER, CBE

CHAIRMAN

5nR17801

APPENDIX 1

2000/01 OUTTURN - VARIATIONS

APPENDIX 2

EXPENDITURE OUTSIDE COMMITTEE CASH LIMITS

APPENDIX 3

SUMMARY OF ADDITIONAL PROPOSALS

APPENDIX 4

OVERALL SUMMARY

APPENDIX 5

EXTENT TO WHICH EACH COMMITTEE'S

CAPITAL PROGRAMME ACHIEVED IN 2000/01

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APPENDIX 6

ANALYSIS OF PAYMENTS OVER COMMITTEES 2000/01

Analysis of payments over type of expenditure 2000/01

APPENDIX 7

CAPITAL FINANCING 2000/01

The proposed method of financing these payments is set out below:

Table 2