The Cabinet gave consideration to a report of the Director of Finance which provided Members with an update on the Council’s 2020/21 forecast revenue budget position at Annex 1 and the financial position of the capital programme as at 31 December 2020 (Quarter 3), together with the revised capital programme 2020/21 to 2025/26, as outlined in section two of the report at Annex 2. Both elements of the report incorporated more recent information as appropriate.
It was reported that the current forecast outturn position for 2020/21 was a projected favourable variance of £0.522m after allowing for approved and pending transfers to and from reserves.
The position also included additional costs and pressures that have been identified by the Authority in this financial year as a direct result of the Governments ongoing arrangements to mitigate the spread of COVID-19 which commenced on 23 March 2020. The additional pressures included forecasts of both income shortfalls and additional expenditure that have impacted on the Authority’s budgets as a result of the pandemic
The pandemic has affected nearly all aspects of Council service delivery; however, most significantly People and Place, Children’s Services and Community Health & Adult Social Care Portfolios. Action had been taken and would continue up to the year end 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 £25.802m un-ringfenced Government COVID related grant funding from the Ministry for Housing, Communities and Local Government (MHCLG), of which £7.641m was received in 2019/20 and held in a specific Earmarked Reserve to underpin the 2020/21 budget. There had been actual, in-year, receipts of £17.261m of COVID Emergency Funding, including £1.281m for the first submission for loss of income in relation to sales, fees and charges under the income compensation scheme (SFC). Further provision was made for the second and third SFC submissions in the sum of £0.924m and £0.900m respectively, the former had been submitted but not yet paid, the latter was an estimate for the period December 2020 to March 2021.
The COVID pressure was further offset by actual and anticipated refunds from the Greater Manchester Combined Authority (GMCA) of £3.133m together with a contribution from Oldham CCG to support the cost of adult social care services via the Section 75 Pooled Funding Agreement that was in place between the Council and the CCG.
In Annex 1 to the report, both the full Government grant and the GMCA refunds were presented as single sums so that it highlighted the level of variation across all Council budgets. However, this summary report presented the position after applying the Government grant and the refunds across Portfolio areas.
An update on the major issues driving the projections were detailed within Annex 1, Section 3.
Section 4 of the report supplemented by Appendices 3 and 4 advised the Cabinet of the grants that the Council had received. There had been a number of developments particularly in relation to support for businesses and to provide additional for the Council. Further grant funding and external contributions were possible, as a result, both the overall financial position and the application of Government grant could change before the end of the financial year.
As this financial monitoring report reflected the financial position at Quarter 3 updated with more recent information where possible, it could be regarded as a reliable indicator of the potential year end position. Therefore, based on current projections it was anticipated that the Council would retain at least the current, favourable position to the end of the financial year.
The report outlined the most up to date capital spending position for 2020/21 to 2025/26 for approved schemes. The revised capital programme budget for 2020/21 was £71.012m at the close of Quarter 3, a net decrease of £76.620m from the original budget of £147.632m. Actual expenditure to 31 December 2020 was £56.080m and had increased to £61.483m at the end of February 2021 (86.58% of the forecast outturn). The forecasts for 2021/22 onwards reflected the Capital Strategy and Programme approved at the Budget Council on 4 March 2021.
It is probable that the forecast position would continue to change before the year end with additional re-profiling into future years.
RESOLVED – That:
1. The forecast revenue outturn for 2020/21 at Quarter 3, being a £0.522m favourable 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 of the report be approved.
4. The revised capital programme for 2020/21 to 2025/26 at Quarter 3 as presented in Annex 2 of the report be approved.