Rother council finances - good news

Monday's cabinet meeting will be recommended to put the 45,000 into the authority's uncommitted reserves.

Director of resources Joy Cooper will tell the cabinet: "The revenue budget outturn for 2006-2007 demonstrates that, despite issues with the new financial systems, by careful management of the council's finances our spending has been controlled successfully during the year."

The cabinet will be told: "The financial performance of the council's general fund services in 2006-2007 has resulted in a small deficit of 16,000.

"This represents a 0.1% variation from the net budget of 12.381m.

"This deficit was offset by additional income of 61,000 from the Government performance reward grant resulting in an overall surplus of 45,000.

"The council's investment performance has achieved a greater return than budgeted.

"The overall net return on all the council's investments amounted to 1,479,983, which is an average interest rate of 4.47 %.

"This is below the target rate for the year, based on the 7 Day LIBID rate (Financial Times), of 4.98%.

The in-house team achieved just below this target at 4.87% whereas the fund managers achieved only 4.27%.

"However, for 2006-2007 our revenue budget anticipated a return, based on the fund manager's initial indicators of 4.25%.

"There are two main reasons for the over-achievement of income; firstly the out-performance of the budgeted interest rate and secondly the difference between the budgeted and actual sums invested."

In order to establish stability within the revenue budget, investment income is fixed at 4.25%. The council and its fund manager, Invested, over-achieved this benchmark resulting in an increase in interest earnings of about 74,000.

Investment earnings increased by 338,000 and in line with council medium term financial strategy the excess income has been transferred into earmarked reserves.

Rother car parks, particularly those at Bexhill and Camber, did well as a result of last summer's fine weather.

But the report contains a warning about 2007.

"As with any demand-led service, there are risks of under-achieving income if forecasts are set too high, particularly should the district suffer from sustained bad weather during the peak holiday seasons as has been the case in 2007."