P3 budget monitoring report is going to Cabinet on 22 September 2021 and includes details about General Fund revenue, Dedicated Schools Grant (DSG), Housing Revenue Account (HRA) and progress made against savings targets.

The Committee received a report that (i) presented the budget monitoring report 2021-22 as of 30^th June 2021 for the General Fund, Dedicated Schools Budget (DSB) and the Housing Revenue Account (HRA), (ii) detailed progress made against savings targets and the Council’s capital programme; and (iii) provided projections on General Fund earmarked reserves and the forecast impacts of Covid on the Councils finances in 2021-22. A summary of the discussions and questions raised is set out below:

The Committee

v  Observed that the report is going to Cabinet on 22^nd  September 2021 see following link

v  Noted that the projection for the General Fund outturn is for an overspend of £0.1m, which already considers the use of some earmarked reserves in delivering services (i.e. without the use of these reserves there would be a higher forecast overspend).

v  Noted that given the latest forecast financial position, earmarked General Fund reserves are consequently projected to reduce; from £173m to £166m by the end of this fiscal year.

v  Accepted that it is important to note that the reserves position of the Council is uncertain pending the closure of the statement of accounts for the period 2016 – 2021.

v  Noted that the Councils budget has been stretched for some time, but the pandemic has exacerbated the situation. It has increased the amount that the Council has had to spend on protecting the most vulnerable residents and sets the Borough on a path to rebuild and reboot for a fairer future.

v  In response to questions raised regarding the current interest rates and inflation noted that the Council has modelled the current and anticipated funding available for individual services within the projected resource constraint (e.g. sources of council revenue, including grants, local taxes, fees and charges, investment income).

v  Noted that the Medium-Term Financial Strategy (MTFS) is subject to a regular review and as part of that process the Council maintains an in-year contingency to address any ‘budget short fall’ and reserves can be used on a one-off basis.

v  Asked if an analysis could be provided on the impact of inflation on contracts especially if inflation remains at its current level.

v  Stated that there would benefit in undertaking a benchmarking exercise in the autumn in relation to the  New Homes Bonus. This exercise should primarily look at what assumptions have other boroughs made in their MTFS in relation to New Homes Bonus.

v  Stated that it would be useful to know what will the impact be of the National Insurance increase for Heath & Social Care have on the Council both as an employer and as purchaser of services? As this information would then help to inform scrutiny of the budgetary process prior to the publication of firm and detailed spending proposals.

v  Noted that the Place Directorate is forecasting a £4.8m adverse variance before proposed reserve drawdowns. The Directorate is projecting to drawdown £5.6m from agreed and ringfenced reserves, identified during the budget setting process,  ...  view the full minutes text for item 6

The Pre-Decision Scrutiny Questions and officer responses were noted.

DECISION

1.    To note the Council’s 2020-21 provisional outturn position against General Fund, Dedicated Schools Budget, Housing Revenue Account and earmarked reserves for 2020-21;

2.    To note that the reserves position of the Council remains somewhat uncertain pending the closure of the statement of accounts for the period 2016 – 2020;

3.    To note the Council’s provisional outturn position against General Fund and Housing Revenue Account capital programme approved budgets for 2020-21;

4.    To note that there are no equalities implications directly resulting from this report, as set out in Section 4 of the report.

Action by:

INTERIM CORPORATE DIRECTOR, RESOURCES AND GOVERNANCE (K. BARTLE)

(Head of Strategic Finance (A. Khan)

Councillor Candida Ronald, Cabinet Member for Resources and the Voluntary Sector introduced the report providing the Council’s Budget Outturn for 2020-21. She highlighted the massive uncertainty the Covid-19 pandemic had caused all councils but that government funding had helped to mitigate some of the impact but much of it had been last minute which made planning very difficult. Every forecast made had been wide of the mark for the year.

Despite this the Council was showing a small underspend overall compared to the expected small overspend. Departmental budgets varied significantly often impacted by the pandemic. Amongst other details of the report, she highlighted issues around business rates and council tax collection with a likely shortfall overall.

She noted concerns had been raised about loans to other local authorities but she reported that this was normal, low risk, activity.

During discussion officers provided an initial verbal response to the Pre-Decision Scrutiny Questions, detailed answers were to be provided later in the week. The significant government support during the pandemic was also noted.

The Mayor welcomed the report and proposed the recommendations set out in the report. The Members present agreed the recommendations set out and it was:

RESOLVED

1.    To note the Council’s 2020-21 provisional outturn position against General Fund, Dedicated Schools Budget, Housing Revenue Account and earmarked reserves for 2020-21;

2.    To note that the reserves position of the Council remains somewhat uncertain pending the closure of the statement of accounts for the period 2016 – 2020;

3.    To note the Council’s provisional outturn position against General Fund and Housing Revenue Account capital programme approved budgets for 2020-21;

4.    To note that there are no equalities implications directly resulting from this report, as set out in Section 4 of the report.