REPORT OF THE CABINET/LEADER

PART I

FINAL ACCOUNTS 2002/03

1. The Cabinet has approved the final accounts for the year ending 31 March 2003. The draft statutory Statement of Accounts giving full details is circulated separately to each Member of the Council and the Constitution requires the Council to approve it at this meeting. A copy of the original report to Cabinet has also been circulated. Some of the significant features of the accounts are described in the following paragraphs.

Service Cash Limited Expenditure and Total Expenditure

2. Service cash limited expenditure in 2002/03 (summarised in Appendix 1) was just £181,000 below the revised estimate. This represents 0.02% of service spending and the Cabinet is very satisfied with this close level of budgetary control. Underspendings of £16,000 (Education), £331,000 (Policy and Resources), £18,000 (Recreation and Heritage) and £72,000 (Social Care) were offset by a net overspending of £256,000 by Environment due, principally, to the costs of storage and disposal of refrigerators exceeding the additional grant received from the Government by £327,000 and savings from other budgets being insufficient to compensate fully for this. This overspending had been identified in budget monitoring reports during the year.

Action with regard to underspendings and overspendings

3. On the underspendings, the Cabinet has agreed to adhere to current policy and return 50% to the service. Retention of the other 50% of underspending (£218,000) meets the majority of the cost (£256,000) of the overspending on disposal of refrigerators.

Other budgets

4. The overall underspend on other budgets is £197,000 (see Appendix 2).

Outturn and balances

5. Taking into account the above, the 2002/03 outturn may therefore be summarised as follows:

£000
Service underspending -181
Other budgets -197
Earmarking of 50% of service underspends 219
____
Potential increases in balances 159
____

The Cabinet has agreed that £200,000 be added to supplement the Leader's grants budget on a one-off basis during 2003/04 leaving a net reduction of £41,000 in balances at 31 March 2004. The impact on balances is set out as Appendix 3.

Earmarked Reserves

6. Earmarked reserves have reduced to £58m at 31 March 2003, which is £5m more than assumed when the budget was reviewed but £10.8m less than the reserves at the start of the year. The total position with regard to variations in the earmarked reserves is set out as Appendix 4.

Treasury Management

7. The Cabinet has approved the County Treasurer's annual report on the administration and management of the County Council's borrowing, debt and investment.

Pension Fund accounts

8. Members will recall that the County Council approved the separate accounts for the Pension Fund at its last meeting.

Financial Management Policy

9. The County Council's Financial Management Policy forms the basis of its medium term financial strategy. The policy document contains key policies designed to maintain and seek continuous improvement in

- overall financial planning to integrate with other strategies

- effective management of capital resources and budgets

- ensuring good practice and probity

- the efficient and accessible processing of transactions.


Full details are contained in the original report to Cabinet.

Capital Spending and Financing 2002/03

10. The Cabinet has reviewed capital spending and financing in 2002/03. Total capital payments amounted to £156m, some £3.4m more than was estimated at revised budget stage. £2.7m of the higher spending was on schemes funded by outside agencies including £0.5m fees on the nursing homes programme which had not yet been reimbursed by the Department of Health. A total of £1m was spent on schemes which would be reimbursed by schools and £1.1m was on schemes supported by Government approval. Payments on locally funded schemes were £1.4m less.

11. Capital receipts during the year amounted to £19.3m. This was £2.6m less than was estimated due to the timing of some receipts as between 2002/03 and 2003/04. Capital receipts in 2003/04 should therefore be correspondingly higher. Government grants of £28m were principally for Education (£23.7m).

12. The County Council's debt outstanding on 31 March 2003 was £343.1m. The net increase in debt was £39.3m.

13. Appendix 5 shows the extent to which the capital programme of each service area was achieved in 2002/03. The record of payments for each service and the nature of those payments is shown in Appendix 6. An analysis of capital receipts is shown in Appendix 7 and trends in outstanding debt in Appendix 8.

RECOMMENDATION

That the draft 2002/03 Statement of Accounts as set out in the documents circulated separately be approved.

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