The Cabinet gave consideration to a report of the Director of Finance which provided an update on the Council’s 2019/20 forecast revenue budget position at Annex 1. It also advised, at section 2 of Annex 2, of the financial position of the capital programme as at 31 December 2019 (month 9) together with the revised Capital Programme covering the period 2019/20 to 2024/25 reflecting the approval of the updated capital programme by Council on 26 February 2020.
The current forecast outturn position for 2019/20 was a projected favourable variance of £0.065m compared to an adverse variance of £1.367m at month 8. This was after allowing for approved and pending transfers to and from reserves.
Continuing to be the most significant areas of concern were the People and Place, Children’s Services and Community Services & Adult Social Care portfolios. Management action had been taken and would continue up to the end of the financial year to address variances and take mitigating action as detailed in the report.
The overall corporate position was, to a large extent being managed by offsetting the adverse variances with favourable variances, most noticeably from Capital, Treasury and Corporate Accounting budgets. An update on the major issues driving the projections was set out in Annex 1, paragraphs 2.13.1 to 2.13.54.
Management action had continued across all service areas to review and challenge planned expenditure and to maximise income generation. Whilst progress had been made there were some underlying on-going challenges. Cabinet noted that the approved 2020/21 budget had been prepared so that issues identified by the 2019/20 budget monitoring process had, where necessary, been addressed. This, together with continuation of management action and the implementation of new ways of working arising from the transformation programme, was expected to reduce the level of overall in-year variance in 2020/21.
Information on the month 9 position of the Dedicated Schools Grant (DSG), Housing Revenue Account (HRA) and Collection Fund was outlined in the report. There were currently no significant issues of concern in relation to the HRA, however the Collection Fund, whilst forecasting an in-year deficit of £0.127m, remained in a cumulative surplus position. The DSG continued to be an area which was facing financial challenge, with a projected deficit increase in 2019/20. Action was being taken with the aim of reducing the cumulative deficit and bringing the DSG towards a balanced position.
The report outlined the most up to date capital spending position for 2019/20 as at 31 December 2019 (month 9) having regard to new developments and changes expected before the year end. The revised Capital Programme budget was £52.048m, a net decrease of £32.284m from the original budget of £84.332m. Actual expenditure to 31 December 2019 was £41.685m (80.09% of forecast outturn). It was probable that the forecast position would continue to change before the year end with additional re-profiling into future years.
The Capital Programme projections for years beyond 2019/20 reflected the Capital Strategy and Capital programme approved at Budget Council on 26 February 2020. This extended the capital planning period to 2024/25 and included a significant increase in forecast spending arising from the Creating a Better Place strategy.
Option 1 - To approve the forecast revenue and capital positions presented in the report including proposed changes.
Option 2 - To approve some of the forecasts and changes included in the report.
Option 3 - Not to approve any of the forecasts and changes included in the report.
RESOLVED – That:
1. The forecast revenue outturn for 2019/20 at month 9 being a £0.065m underspend be approved.
2. The forecast positions for the DSG, HRA and Collection Fund be approved.
3. The use of reserves as detailed in Appendix 1 to Annex 1 be approved.
4. The revised Capital Programme as at month 9 for 2019/20 and the projections for the period 2020/20 to 2024/25 be approved.