Agenda item

Further to Minute 58 of the previous meeting held on the 23^rd March, 2016, the Director of Finance, Assets and Information Services will submit a report updating the Committee of the reserves position as at January, 2016.

Further to Minute 58 of the previous meeting held on the 23^rd March, 2016, the Director of Finance, Assets and Information Services submitted a report updating the Committee of the reserves position as at January, 2016.

The report gave details of the current banked reserves and the Director gave a breakdown of the following matters:

·         Unavailable – Statutory items – Minimum working balance, school balances, funding to cover anticipated liabilities including the Council’s down-sizing, insurance costs and sums set aside for the Council priorities such as the Town Centre redevelopment

·         Unavailable – Investment Decisions – previously agreed by Cabinet following approval of the Council’s Reserves Strategy

·         Available resources – including unallocated reserves previously reported in the 2014/15 audited position

She commented that a full review of the reserves would be undertaken as part of the refresh of the Council Reserves Strategy which would form part of the fully updated 2017/18 – 2018/19 Medium Term Financial Strategy to be reported later in the year.

It had also been considered prudent to bolster the Authority’s Minimum Working Balance (MWB) from its current level of £10m to £15 and the rationale for this was outlined.  This amount equated to approximately 10% of the anticipated 2016/17 net spend budget and was considered appropriate and proportionate to the risks faced by the Council over the medium term.

The capital position had also been reviewed.  The previous Reserves Strategy had identified “24.2m of investment decisions requiring capital investment which resulted in an oversubscribed positon of £3.4m.  Subsequently further unallocated capital receipts had been identified of around £3.2m resulting in a minor over-subscribed position of around £0.2m.

In the ensuing discussion reference was made to the following:

·         A further explanation was provided of the rationale for the increase in reserves within the context of the move to the new business rates position and the volatility associated with potential income

·         In response to detailed questioning, the Director explained that no information was available which would allow comparisons/benchmarking to be made with other authorities. 

·         Arising out of the above discussion the External Auditor commented on their approach to assessing the robustness of the proposals particularly in relation to Value for Money, contextual information and the Medium Term Financial Plan.  One member made reference to information available via the Tax Payers Alliance but commented that this made no reference to contextual information

·         The rationale for the following was outlined:

o   The Insurance Fund position.  It was noted that this had been reviewed and that the value would reduce in future years.

o   The over achievement of 2015/16 savings with particular reference to the contribution to savings.  It was suggested that a briefing/training session be provided on this prior to one of the meetings in months 1, 2 or  3 of the next municipal year

·         The Director of Finance, Assets and Information Services reported that a further update of the Reserves Strategy would be provided in June/July.  The Authority was currently in a healthy position with adequate reserves to assist in meeting its objectives and particularly in helping to grow the economy.  The primary aim was to ensure the appropriate balance of funds for investment against available reserves

RESOLVED that the report and position with regard to reserves and balances be noted.