A report from the Executive Director – Resources is attached. (Key decision – reference number 5200)
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 September 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. That the revenue budget forecast including the impact of Covid-19, Government support and the Council’s response was an £0.4m overspend, compared to £10.6m overspend reported at Quarter 1. The detailed breakdown of the revenue budget forecast as set out in the report was explained and highlighted. The impact of Covid-19 had been assessed by forecasting the additional expenditure, loss of income and impact on the savings programme, the total forecast was £64.6m.
3. That the Government had provided funding of £30.9m to support the Council’s response and further support had been introduced to help manage the loss of sales and fees and charges, as outlined in paragraph 4 of the report.
4. That the Council remained in a financially challenging position, with an estimated budget gap for 2021/22 of £18.117m. Excluding the impact of Covid-19 the budget gap for 2021/22 would have been £1.715m.
5. The impact on the Council’s collection fund through Council Tax and Business rates collections. The Government had announced that the deficit could run for the next three years, as explained in the report.
6. That as part of the package of measures to reduce the financial pressures caused by the pandemic, a mid-year review of the Council’s fees and charges had been undertaken, for approval by the Council following Cabinet consideration, as detailed in Appendix H of the report.
7. The current position in relation to the Housing Revenue Account and Dedicated Schools Grant as set out in Appendices L and M of the report.
8. In particular, the Covid-19 budget pressures outlined and reflected in the Appendices of the report.
9. The Council’s financial position would continue to be closely monitored and carefully managed as set out in the report. The Council was continuing to face its most significant financial challenge.
10. The funding which had been received by the Government to date. The Council would continue to lobby for additional resources to meet the costs incurred in responding to the pandemic. The significant level of uncertainty on future Government funding settlements was highlighted together with the lack of long-term planning by the Government which impacted on the Council’s ability to plan and manage its budget over the coming years. The Government would be announcing a one-year funding allocation in December. Members stated that the Government’s funding approaches were unhelpful to Councils future budget planning in the medium term.
11. The continuing concerns over the lack of adequate funding to meet the costs and demand of Adult Social Care provision. The funding pressures in recent years together with the ongoing impact and consequences of the pandemic were highlighted.
Alternative Options Considered: Not relevant in the context of this report.
DECISION: The Cabinet agreed
1. To note the General Fund, Housing Revenue Account (HRA) and Dedicated Schools Grant (DSG) forecast revenue outturn position for 2020/21.
2. To note the Covid-19 impact of £64.63m and the Council’s response to mitigating this pressure. Noted that without the pandemic the forecast underspend would have been £0.345m for the General Fund. The progress made on the journey to setting a robust and resilient budget.
3. The outcomes of the mid-year fees and charges review and recommended on to Council for approval.
4. 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.
5. To note the forecast level of reserves and implications for 2020/21 and over the life of the Medium Term Financial Plan.
6. To note the forecast pressures of £30.872m for 2021/22 and a budget gap of £18.117m.
Reason: To ensure that Members were aware of the forecast outturn position, including the level of reserves 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 5200)