Agenda item

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 2021/22 Capital Programme as at 31^st December 2021 together with the revised capital programme 2022/23 to 2026/27 as outlined in section 2 of the report at Annex 2 of the report.

Revenue Position

The current forecast outturn position for 2021/22 was a projected surplus variance of £2.680m 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 pandemic. The additional pressures included forecasts of both income shortfalls and additional expenditure that had impacted on the Authority’s budgets.

The pandemic was continuing to affect nearly all aspects of Council service delivery; 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 right up to the end 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). 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 of the report.

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, 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 3 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.

Capital Programme

The report outlined the most up to date capital position for 2021/22 to 2026/27 for approved schemes. The revised capital programme budget for 2021/22 was £38.709m which was considerable movement from the month 8 forecast of £52.588m and a net decrease of £47.293m from the original budget of £86.002m. Actual expenditure to 31 December 2021 was £29.304m (75.7% of the forecast outturn).

It was anticipated that the forecast outturn will be close to the final position, although there may be further reprofiling up to the year-end.

Options/alternatives considered

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

Option 2 - To agree some of the forecasts and changes included in the report.

Option 3 - not to agree any of the forecasts and changes included in the report and ask for further information.

RESOLVED – That:

1.    The forecast revenue outturn for 2021/22 at Quarter 3 being a £2.680m favourable variance having regard to the action being taken to manage expenditure be approved.

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

3.    The use of reserves as presented in Section 8 of Annex 1 of the report be approved.

4.    The revised capital programme for 2021/22 to 2026/27 as at Quarter 3 be approved.