Agenda item

This matter is the responsibility of the Portfolio Holder for Corporate Resources, Cllr Ross Henley.

This report provides an update on the projected outturn financial position of the Council for the financial year 2020/21 (as at 31 December 2020).

This report provided an update on the projected outturn financial position of the Council for the financial year 2020/21 (as at 31 December 2020).

The position this year is significantly affected by COVID – both in terms of large additional sums spent on issuing financial assistance to local businesses and council tax payers, and direct impact on the Council’s service costs and income. Additional COVID related financial pressures, through additional costs and income losses, are forecast to be £7.3m for the year. This is partly offset by projected £5.4m emergency grant funding from Government, but has also required the Council to reprioritise funds and support the annual budget from reserves. The net impact of COVID on the Council’s own resources is therefore projected to be £1.9m for the year. Despite this, the Council remains financially resilient and continues to forecast adequate reserve balances.

The current Revenue Budget forecast was summarised:-

General Fund Revenue:- Projected £1.466m underspend (£245k overspend relating to COVID and a net underspend of £1.711m for non-COVID)

Housing Fund Revenue:- Projected £274k underspend

Although services were projecting fairly large underspends with the General Fund, this is largely due to timing of spend. Based on the Q3 projected year end position, budget holders have indicated proposals to carry forward £1.277m of expenditure into next year’s budget, which if approved would effectively reduce the underspend to £189k. These proposals will be finalised at the year end.

During the discussion the following comments and questions were raised:-

·        External Operations and Climate change set out in table 1 was considered, a comparison with the budget considered in February and a possible disparity was raised.

·        The increase in the budget could have been in relation to capital charges and depreciation, this would be taken away for a response to be provided following the meeting.

·        Page 143 detailing the senior management budget was questioned with the reasoning for difference in costs compared to the budget report.

·        Page 145 – more information was requested relating to the contribution towards capital cost to investment properties. This was as a result of overachieving on net budget in this financial year.

·        Page 146 – a significant backlog of arears was questioned, with more information requested.

·        Capital budget and HRA budget changes and adjustments as reported at the end of December compared with the new financial year were questioned.

·        A senior management underspend was reported in the budget due to the senior management restructure the budget was not being needed to support staffing costs.

·        Work to carry over budgets was being undertaken, there remained a budget for IT member training which would be utilised for Councillors shortly.

·        Review of IT heritage systems was questions along with the systems changes planned and required for the future.

·        Major systems had been in place with future planning and timing priority of this being planned currently. This could be shared with the Committee if helpful.

·        Having large underspends was a concern and was not considered good financial management in future years. It was acknowledged that this was a significantly difficult year but and underspends would be avoided in future years.

·        A long term asset maintenance programme was being created, this was acknowledged as a risk with the potential for unforeseen maintenance going forward until the programme has been completed.

The Scrutiny Committee reviewed and noted the Council’s forecast financial performance and projected reserves position for 2020/21 financial year as at 31 December 2020.