Minutes:
The Executive Member for Environment and
Finance & Governance and the Director of Finance submitted a report for the
Executive’s consideration. The purpose of the report was to advise of the
Council’s financial position at Quarter Two 2021/22, including the projected
effect of Covid-19 on the Council’s finances.
As reported in previous reports, the Covid-19
pandemic was continuing to have a significant impact on the Council’s financial
position. That had made the management of the Council’s finances more difficult
due to the constantly evolving situation and also the level of uncertainty
regarding the financial effects of Covid-19 in 2021/22 and future years.
Covid-19 financial pressures were being monitored separately from the normal
non-Covid-19 financial position, and those were reported separately in
paragraphs 50 to 78 of the submitted report.
The 2021/22 Revenue budget for the Council was
£116,492,035. During Quarter One there had been a number of transfers of
services between directorates due to managerial changes, and the financial position
was reported against the new directorate budgets. The Council’s outturn
position for 2021/22 for non-Covid-19 elements was projected to be an overspend of £2.605m (2.2%). The split by directorate was
shown in the table below paragraph 7 of the submitted report, with the Quarter
One position also included for information.
The detail of the variances contained in the
table at paragraph 7 were set out in the submitted report (paragraphs 17 to
49). At Quarter Two, 29 areas were projected to be spent +/- £150,000 of the
agreed budget. Where appropriate, the on-going effects of variances would be
considered as part of future updates of the Council’s Medium Term Financial
Plan.
The overspend of £2.605m, when added to the
estimated Covid-19 pressures of £1.550m detailed in paragraphs 50 to 78,
resulted in a total projected outturn pressure at year-end 2021/22 of £4.155m,
an increase of £402,000 from the position reported at Quarter One.
It was proposed that the total projected
overspend in 2021/22 would be covered by the full utilisation of the Social
Care Demand Reserve of £0.5m and the Children’s Services Demand Reserve of
£0.732m, which were created at the end of 2020/21. It was proposed that the
remaining £2.923m of the total projected outturn pressure was funded from the
£4.512m Covid Recovery Reserve, which was created
during 2020/21 to cover the potential costs arising from the Covid-19 recovery
in 2021/22 and future years.
The level remaining after the use of those
reserves was shown in the Reserves and Provisions section of the submitted
report (see paragraphs 113 and 114) and in Appendix 2.
The revised Investment Strategy to 2023/24 was
included at Appendix 1 for approval. It was noted that capital receipts
assumptions had been re-evaluated in light of Covid-19 and the Revised
Investment Strategy took account of that.
The split by directorate was shown in the table
below paragraph 91 of the submitted report, which also showed the “real”
projected outturn variance if all of the additional new schemes, increased
schemes, reduced schemes, and transfers between directorates were
excluded. Explanations for variances of
+/- £150,000 across sixteen schemes were set out in paragraphs 92 to 105 of the
submitted report. Those variances required movement within the Council’s
four-year Investment Strategy, but did not affect the overall investment or
cost of borrowing.
ORDERED
1. That the 2021/22 revenue budget Quarter Two total projected
outturn of £4.155m, representing a £2.605 m (2.2%) overspend on non-Covid-19
elements, and the estimated financial effect of Covid-19 in 2021/22 of £1.550m,
and the proposed actions to address that be noted.
2. That the proposed use of the following reserves to fund the
total projected overspend of £4.155m in 2021/22 be noted:
·
Social Care Demand
Reserve (£0.5m)
·
Children’s Services
Demand Reserve (£0.732m)
·
Covid Recovery Reserve (£2.923m)
3. That the 2021/22 capital budget Quarter Two predicted
outturn of £64.814m against a budget of £82.029m be noted, and the proposed
revised Investment Strategy to 2023/24 at Appendix 1 be approved.
REASON
To enable
the effective management of finances, in line with the Council’s Local Code of
Corporate Governance, the Scheme of Delegation and agreed corporate financial
regulations.
Supporting documents: