Agenda item

Consider report by the Chief Financial Officer providing an analysis of the Council’s balances as at 31 March 2015 and the projected balances at 31 March 2016.   (Copy attached.)

There had been circulated copies of a report by the Chief Financial Officer providing an analysis of the Council’s balances as at 31 March 2015 and on the projected balances at 31 March 2016.   The Council’s General Fund useable reserve (non-earmarked) balance was £8.121m at 31 March 2015.  The total of all useable balances excluding developer contributions at 31 March 2016 was projected at £6.876m.  The movement was as a result of an increase in reserves due to additional income from Heritable, (£0.201m) and the draw down of reserves to fund changes in legislation in care services (£0.307m) and a transfer to allocated reserves to support in the ER/VS scheme (£1.139m). Approval was sought in the accompanying revenue monitoring report to draw down an estimated £0.700m to fund the shortfall in funding associated with the phasing of the pay award in 2015/16.  In setting the 2015/16 budget Council approved a 1% provision for pay award in 2015/16 followed by an estimated 1.5% in 2016/17 equating to 2.5% over 2 years.  This was in advance of national negotiations concluding.  Negotiations led by COSLA had now been concluded with the SJC and SNCT negotiating bodies and a pay award for all staff had been agreed to pay 2.5% over a 2 year period at 1.5% in 2015/16 and 1% for 2016/17.  This presented a one year phasing issue in terms of the Council’s Financial Plan and a draw down from Reserves was consequently required to align budgetary provision with the negotiated settlement position. It was understood that the settlement of the pay award would be processed in November 2015 payroll backdated to 1 April 2015.  The balances represented in this report were stated before any draw down of funds for this purpose. The Council’s allocated reserve balance was £3.379m at 31 March 2015 and was projected to be £3.819m at 31 March 2016.  This movement was as a result of the draw down of allocated reserves to fund the 2015/16 Financial Plan (£0.508m), Police & Fire Reserves (£0.091m) and provision for Roads Maintenance (£0.100m) and an increase in allocated reserves to support the ERVS scheme (£1.139m).  There were a number of areas of potential financial pressures identified in the accompanying revenue monitoring report identified for 2015/16, which if uncontained by management action might require a call on these reserves.  The projected balance on the Capital Fund of £5.743m would be affected by any further capital receipts, developer contributions, interest credited and any expenditure authorised to be financed from the Fund during the remainder of the financial year.

DECISION

AGREED:-

(a)        to note the projected revenue balances as at 31 March 2016 as detailed in Appendices 1 & 2 of the report;

(b)       to note the projected balance in the Capital Fund as detailed in Appendix 3 to the report;

(c)        to note the establishment of an ER/VS allocated reserve of £1.139m as reflected in the revenue monitoring report detailed in the report; and

(d)       to approve the draw down of an estimated £700k reserves to address a shortfall in funding associated with the phasing of the pay award in 2015/16, actual draw down would  be reflected in the next Executive Committee report when the value was confirmed.