Agenda item

Consideration was given to a report which provided the Select Committee with an update on the Council’s 2020/21 forecast revenue budget position and the financial position of the capital programme as at 31 August 2020 (Month 5), together with the revised capital programme 2020/25. It was noted that the report had been considered at the Cabinet meeting on 19 October 2020.

The report enabled the Select Committee to continue its review of the financial position of the Council. It presented the current forecast revenue outturn position for 2020/21at month 5 together with that of the Dedicated Schools Grant (DSG), Housing Revenue Account (HRA) and Collection Fund. It also outlined the most up to date capital spending forecasts for 2020/25 for approved schemes.

The information in the report and its appendices enabled the Select Committee to continue to review how the Council was dealing with the financial challenge of the COVID-19 pandemic, how the various additional grants that had been received had been applied and how this translated to the forecast revenue budget position for 2020/21 and future years.

The Select Committee noted that the COVID related expenditure gap was shown as £14.311m and was an update on the August return that was submitted to the Ministry of Housing Communities and Local Government (MHCLG) on 4 September 2020, at which point the gap was estimated to be £14.955m. The overall projected overspend (COVID related and business as usual variances) presented in the report was a reduction of £1.245m compared to the £15.556m reported at month 4. The figures did not include the most recently announced general Government grant nor the grant compensation for lost income in relation to sales, fees and charges. A return was submitted to MHCLG in early October seeking a reimbursement of £1.282m of post income. Confirmation of this grant had not yet been received from the MHCLG.

The report also provided an update in relation to both ringfenced and un-ringfenced, mainstream and COVID specific grant funding.

Members asked for and received clarification of the following:

•              Impact of second lockdown – this would be reflected in the Month 7 report and the expectation was that the financial position would have been made worse. There had been unprecedented demand for all types of social community care which is main driver of the overspending. The level of additional government support was not yet known and it was hard to predict the overall impact the lockdown.

•              The Government had initially talked about “spending what it takes” and had now moved to Talk was now of “sharing the burden”, what was the impact of this policy change – what share would Oldham have to take would be our share – there had been four tranches of general funding from Government and the gap between resources available and resources required had been closing prior to the imposition of Tier 3 and lockdown restrictions. The gap was now increasing again, but it remains difficult to be predict the final outturn for 2020/21. Reserves could be used to bridge a financial gap but this would reduce financial resilience in future years.

RESOLVED that the report be noted.