Consideration was given to a report of the Director of Finance which provided the Cabinet with an update on the Council’s 2021/22 forecast revenue budget position at Annex 1 and the financial position of the capital programme as at 30 September 2021 (Quarter 2) together with the revised capital programme 2021/22 to 2025/26, as outlined in section two of the report at Annex 2.
It was reported that the current forecast outturn position for 2021/22 was a projected surplus variance of £2.413m after allowing for approved and pending transfers to and from reserves.
The position included additional costs and pressures that had been identified by the Authority in this financial year as a direct result of the COVID-19 pandemic. The additional pressures included forecasts of both income shortfalls and additional expenditure that had impacted on the Authority’s budgets. It was noted that following a realignment of Portfolios, the Finance Service was now incorporated within the Chief Executive Portfolio, leaving Procurement as the sole service within the Commissioning Portfolio.
The pandemic was continuing to affect nearly all aspects of Council service delivery; the most significant areas of concern remained 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 £7.737m general COVID support grant and £0.352m from the quarter 1 compensation claim for lost income in relation to sales fees and charges (SFC); in total £8.089m, all of which was received from the Department for Levelling Up, Housing and Communities (DLUHC); formerly the Ministry of Housing Communities and Local Government (MHCLG). In Appendix 1 to the report, the un-ringfenced Government support was presented 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 COVID related variance. However, this summary report presented the position after applying the Government grant across Portfolio areas. An update on the major issues driving the revenue projections are detailed within Annex 1, Section 2.
The current projected position, after adjustment for reserves and, as outlined above, receipt of all additional Government funding to support COVID pressures that the Authority was expecting to receive, was showing, for the first time a net underspend, hopefully demonstrating the impact of the service and corporate actions that had been initiated across all service areas to review and challenge planned expenditure and to maximise income. Action would continue with the aim of, at the very least, maintaining this position to the end of the financial year.
Information on the Quarter 2 position of the Dedicated Schools Grant (DSG), Housing Revenue Account (HRA) and Collection Fund was also outlined in the report. 2022/23). projected deficit in 2021/22. Action is 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 2021/22 to 2025/26 for approved schemes. It was reported that the revised capital programme budget for 2021/22 is £53.043m at the close of Quarter 2, a net decrease of £32.959m from the original budget of £86.002m. Actual expenditure to 30 September 2020 was £13.592m (25.62% of the forecast outturn).
The forecast position would continue to change throughout the year with additional re-profiling into future years.
Option 1 – To approve 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 2021/22 at Quarter 2 being a £2.413m favourable variance having regard to the action being taken to manage expenditure be approved.
2. The Forecast positions for both the Housing Revenue Account, Dedicated Schools Grant 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 2021/2026 as at Quarter 2 be approved.