Agenda item

Consideration was given to a report of the Director of Finance which provided the Cabinet with an update on the Council’s 2020/21 forecast revenue budget position at Annex 1 of the report and the financial position of the capital programme as at 30 September 2020 (Quarter 2) together with the revised capital programme 2020/25, as outlined in section two of the report at Annex 2.

The current forecast outturn position for 2020/21 was a projected deficit variance of £5.369m 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 Government’s ongoing arrangements to mitigate the spread of COVID-19 which commenced on 23rd 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 £23.978m un-ringfenced Government COVID related grant funding, of which £16.638m was reported at month 5. The extra grant was a further £6.058m COVID Emergency Funding and £1.282m by way of compensation for loss of income in relation to sales, fees and charges which had now been confirmed following the first submission to the Ministry for Communities, Housing and Local Government (MHCLG) under the income compensation scheme.

In Annex 1 to the report, the full Government grant was presented as a single sum so that it highlighted the level of variation across all Council budgets, given that there was still insufficient resource to offset the adverse variance. 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 (with two further returns scheduled for the current financial year), both the overall financial position and the application of Government grant would therefore change during the course of the financial year.

Section 4 of the report provided Cabinet with the detail of the grants that the Council had received. There had been a number of developments particularly in relation support for businesses and to provide additional support for the Council following the whole of Greater Manchester moving into Tier 3 (very high) COVID restrictions on 23rd October 2020 and the subsequent national lockdown on 5th November 2020.

As this financial monitoring report reflected the financial position at Quarter 2, it could be regarded as an indicator of the potential year end position, 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 had still to take full effect, it was anticipated that by the year end, the outturn deficit should be reduced and this was starting to be demonstrated in the monthly update reports that have and which would continue 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 2020/21 to 2024/25 for approved schemes. The revised capital programme budget for 2020/21 is £89.946m at the close of Quarter 2, a net decrease of £57.686m from the original budget of £147.632m. Actual expenditure to 30 September 2020 was £35.270m (39.65% of the forecast outturn).

It was 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 together with the proposed changes including the acceptance of new grants outlined in section 2.7 of the report (and as set out in section 4 of Annex 1 of the report) and the proposed delegation of the detailed use to the relevant Director and Cabinet Member in consultation with the Director of Finance.

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 2020/21 at Quarter 2 being a £5.369m adverse variance having regard to the action being taken to manage expenditure be approved.

2.    The detailed allocation of the eight revenue grants set out at section 2.7 and in detail at section 4.2 of Annex 1 to report be delegated to the Cabinet Member and Director within whose Portfolio the grant is administered together with the Director of Finance

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

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

5.    The revised capital programme for 2020/21 to 2024/25 as at Quarter 2 as presented in Annex 2 of the report be approved.