Agenda item

Revenue Monitoring 2020/21: Quarter 1 (June 2020)

A report from the Executive Director – Resources is attached. (Key decision – reference number 5198)



Councillor Mary Maguire (Cabinet Member for Finance and Procurement) introduced the report of the Executive Director – Resources setting out the Council’s revenue budget monitoring position based on information to the end of June 2020.




1.            That the report set out the position with, and without, the impact of Covid-19 which demonstrated that the Council had been progressing on the journey of establishing a robust and resilient financial position prior to the outset of the pandemic.


2.            Without Coronavirus, the financial position at this point in the year would have been much more positive, with a small overspend of £0.6m.  However, due to the virus, the Council now had a £10.6m overspend, with a total of £64.5m forecast for the whole year. 


3.            The situation was constantly under review and regular updates would be received. 


4.            The Government had provided £21.1m in extra funds, further support to help manage the loss of sales, fees and charges income and were allowing councils to run a collection fund deficit over 3 years, but this would not be enough to bridge the large funding gap.


5.            Money has had to be used from the Council reserves including the risk reserve.  Further details are contained in the report. 


6.            The dedicated schools grant had had a deficit of £4.5m last year, and it was forecasted that there would be a further deficit of £2.5m this year, totalling around £7m.


7.            The Housing Revenue Account (HRA) was forecasting a £0.6m overspend, but without the Coronavirus, the fund would have been neutral. 


8.            Paragraphs 27-78 provide information on the underlying pressures with the General Fund, paragraphs 79 to 114 provide an update on the Covid 19 financial impact, paragraph 21 details the Government response, paragraphs 112 to 115 describe the Council’s response to the pandemic and paragraph 23 to 111 discusses the option to run a collection fund deficit and its implications. 


9.            The Coronavirus situation looks to be worsening and the number of cases in the community rising, so the Council has to think about the possible consequences for finances in the future and to encourage people to stay home and protect lives.


10.         The Government was still indicating that they would only be carrying out a comprehensive spending review over one year, which was troubling as the Council cannot in this case effectively plan for the future. 


11.         The Council was under enormous financial challenge, the Coronavirus situation had been catastrophic, but because the Council’s finances had been well managed over the past two years, it was thought to be in a better situation than it could have been. 


12.         There have been significant additional pressures in the housing area, but work would continue developing a new model, the HRA business plan would be reviewed and savings would continue to be identified.


13.         The human cost of the Coronavirus has also been very significant with 1,500 premature deaths and large increases in the numbers of lonely and isolated people.  Made worse because of previous cuts to social services.  These effects would stay long after the financial impacts had passed.


14.         The view that the Government needed to provide extra support quickly and to reform Adult Social Care as promised. 


15.         Thanks from members for their work in this areas.


16.         The Council had experienced many extra costs over this period in order to help protect residents from the effect of the Coronavirus.  These included an additional £1m on personal protective equipment, setting up the supply centre for the delivery of food packages, the new prescription delivery service and many other smaller interventions which many local residents had benefited from. 


Alternative Options Considered: Not relevant in the context of this report. 


DECISION: The Cabinet agreed to note 


1.            The General Fund, Housing Revenue Account (HRA) and Dedicated Schools Grant (DSG) forecast revenue outturn position for 2020/21.


2.            The Covid-19 impact of £64.3m and the Council’s response to mitigating this pressure.


3.            That without the pandemic the forecast overspend would have been £0.6m for the General Fund and further noted the progress made on the journey to setting a robust and resilient budget.


4.            The updated level of reserves as at 31 March 2020 and the forecast and implications for 2020/21 and over the life of the Medium-Term Financial Plan.


5.            That Executive Directors would continue to work with Cabinet Members to implement action plans to reduce the forecast overspend in 2020/21 and implement savings, whilst managing, mitigating and minimising the Covid-19 financial impact.


Reason: To ensure that Members were aware of the forecast outturn position for the authority, including all major variances which were contributing to the outturn position and the mitigating actions being taken and proposed to manage the financial position for 2020/21. 

(Key decision – reference number 5198)

Supporting documents: