Agenda item

The Cabinet gave consideration to a report of the Director of Finance which provided them with 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 2021/26.

In relation to the Revenue position, the Cabinet was 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 have been identified by the Authority in this financial year as a direct result of COVID-19. 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 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 Cabinet noted the overall corporate position was, 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 insufficient resource to fully 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 was 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, continued to show 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. There were no significant issues of concern in relation to the HRA. The Collection Fund

position was improving, with a reduced in-year deficit of £12.159m (of which the Councils share was £11.785m) compared to £13.712m at Quarter 2. Government grant compensation of £13.092m would offset this to produce a forecast surplus of £1.307m which would be available to

support the 2022/23 budget. Whilst the DSG continued to be an area which was facing a financial challenge, recent funding announcements in particular had contributed to an

improved position, reducing the cumulative deficit and bringing the DSG towards an enhanced balanced position in 2023/24

With regard to the Capital position, the report outlines 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 £52.588m at the close of month 8 a net decrease of £33.414m from the original budget of £86.002m. Actual

expenditure to 30 November 2021 was £23.801m (45.29% of the forecast outturn).

The forecast position would continue to change as the year draws to a close with additional reprofiling into future years.

The Month 8 Revenue Monitor and the Capital Investment Programme 2021/22 report was presented to the Policy Overview and Scrutiny Committee on 27 January 2022 to

accompany the suite of 2022/23 budget reports. The Committee was content to note the report and commend it to Cabinet for approval.

Options/Alternatives considered

Option 1 – To approve the forecast revenue and capital positions presented in the report including proposed changes.

Option 2 – To approve some of the forecasts and changes detailed within the report.

Option 3 – Not to approve any of the forecasts and changes detailed within the report.

RESOLVED – That:

1. The forecast revenue outturn for 2021/22 at Month 8 being a £2.672m 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 2021/26 at Month 8 as presented in Annex 2 of the report be approved