Agenda item

Consideration was given to a report of the Director of Finance which provided an the Cabinet with an update on the Council’s 2020/21 forecast revenue budget position as at Annex 1 to the report and the financial position of the capital programme as at 31 July 2020 (Month 4) together with the revised capital programme 2020/25, as outlined in section two of the report at Annex 2 of the report.

Revenue Position

It was reported that the current forecast outturn position for 2020/21 was a projected deficit variance of £17.979m after allowing for approved and pending transfers to and from reserves.

The position also included additional costs and pressures that had been identified by the Authority in this financial year as a direct result of the Governments lockdown arrangements to mitigate the spread of COVID-19 commencing on 23 March 2020. The additional pressures included forecasts of both income shortfalls and additional expenditure that had impacted on the Authority’s budgets as a result of the pandemic

The pandemic had affected nearly all aspects of Council service delivery; however, the most significant areas of concern were the People and Place, Children’s Services and Community Health & Adult Social Care Portfolios. Action was being taken and would continue for the remainder of the financial year to address variances and take mitigating action as detailed in the report.

The overall corporate position was partly being offset by the application of the £16.638m unringfenced Government COVID related grant funding received to date. The full Government grant was presented at Annex 1 to the report as a single sum so that it highlighted the level of variation across all Council budgets, given that there was insufficient resource to offset the adverse variance.

However, this summary report presented the position after applying the Government grant across Portfolio areas. As further General Fund grant was expected in respect of lost income for sales, fees and charges, both the overall financial position and the application of Government grant would therefore change during the course of the financial year. An update on the major issues driving the projections was detailed within Annex 1, Section 2 of the report.

As this financial monitoring report reflected the financial position at Month 4, it could be regarded as an indicator of the potential year end position if action was not taken to reduce net expenditure where possible. However, management action had been initiated across all service areas to review and challenge planned expenditure and to maximise income. Although, the effect of this action has yet to take full effect, it is anticipated that by the year end, the outturn position deficit should be reduced and this should start to be demonstrated in the monthly update reports to be presented to Cabinet.

Information on the latest position of the Dedicated Schools Grant (DSG), Housing Revenue Account (HRA) and Collection Fund was also outlined in the report.

Capital position

The report outlined the most up to date capital spending position for 2020/25 for approved schemes. The revised capital programme budget for 2020/21 was £142.617m at the close of Month 4, a net decrease of £5.015m from the original budget of £147.632m. Actual expenditure to 31 July 2020 was £29.373m (20.60% of the forecast outturn).

It is probable that the forecast position would continue to change before the year end with additional re-profiling into future years.

Options/alternatives considered

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 r

RESOLVED – That:

1.    The Forecast revenue outturn for 2020/21 at Month 4 being a £17.979m adverse variance having regard to the action being taken to manage expenditure be approved.

2.    The forecast positions for the Dedicated Schools Grant, Housing Revenue Account and Collection Fund be approved.

3.    The use of reserves as detailed in Appendix 1 to Annex 1 to the report be approved.

4.    The revised capital programme for 2020/2024 as at Month 4 be approved.