Agenda item

Consideration was given to a report of the Director of Finance which provided an update on the Council’s 2021/22 forecast revenue budget position and the financial position of the capital programme as at 30 November 2021 (Month 8), together with the revised capital programme 2021/22 to 2025/26.

The Cabinet Member for Finance and Low Carbon and the Director of Finance presented the report and addressed the enquiries of the Select Committee.

In relation to the Revenue position, Members were informed that the current forecast outturn position for 2021/22 was a projected surplus variance of £2.672m 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 COVID-19 pandemic. 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 continued to affect 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.

Members were informed that the overall corporate position was partly being offset by the application of the £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). 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 still insufficient resource to fully offset the adverse COVID related variance. However, the summary report presented the position after applying the Government grant across Portfolio areas.

An update detailing the major issues driving the projections was contained within Annex 1, Section 2.

Section 4 of the report advised the Committee 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 support for the Council. Further grant funding and external contributions were expected, as a result, both the overall financial position and the application of Government grant would change during the remainder of the financial year.

Information on the latest position of the Dedicated Schools Grant (DSG), Housing Revenue Account (HRA) and Collection Fund was also outlined in the report. There were currently no significant issues of concern in relation to the HRA, however the Collection Fund was forecasting an overall deficit of £8.074m with the Council’s allocation being £7.741m. Grants received in lieu of Business Rates relating to the provision of Extended Retail Relief would be carried forward into 2022/23 to offset the Business Rates deficit. Current estimates were that those Grants would total approximately £9.045m. This would allow an estimated £1.304m surplus to be used to support the 2022/23 budget. The DSG continued to be an area which was facing a financial challenge with a revised, projected deficit of £3.029m at the end of the current financial year. Action was being taken with the aim of reducing the cumulative deficit and bringing the DSG towards a balanced position. The projection was that the DSG would be in surplus by 2023/24.

In relation to the Capital position, the report outlined the most up to date capital spending position for 2021/22 to 2025/26 for approved schemes. The revised capital programme budget for 2021/22 was £52.558m at the close of Month 8. Actual expenditure to 30 November 2021 was £23.801m (45.29% of the forecast outturn).

Members noted that the most recent projection would continue to change before the year end with additional reprofiling into future years.

RESOLVED that the following be accepted and commended to Cabinet, the :

1.    Forecast revenue outturn for 2021/22 at month 8 being a £2.672m surplus variance.

2.    Forecast positions for the Dedicated Schools Grant, Housing Revenue Account and Collection Fund

3.    Use of reserves as detailed in Appendix 1 to Annex 1

4.    Revised capital programme for 2021/22 to 2025/26 at Month 8 as presented in Annex 2.