Agenda item

Revenue and Capital Budget - Projected Outturn Position as at Quarter Three 2021/22


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 provide information on the Council’s financial position at Quarter Three 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 66 to 95 of the submitted report.


The 2021/22 Revenue budget for the Council was £116,492,035. During Quarter One there was 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 £3.225m (2.8%). The split by directorate was shown in the table at paragraph 7 of the submitted report, with the Quarter Two position also included for information.


The overspend of £3.225m, when added to the estimated Covid-19 pressures of £1.821m, resulted in a total projected outturn pressure at year-end 2021/22 of £5.046m, an increase of £0.891m from the position reported at Quarter Two.


It was proposed that the total projected overspend in 2021/22 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 £3.814m of the total projected outturn pressure be 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.


£1.9m of additional budget efficiency savings were approved by Council on 24 February 2021 as part of the 2021/22 budget setting. There was also approximately £1m of savings approved in previous years relating to 2021/22.


As reported previously at Quarters One and Two it had not been possible to achieve one of the budget savings due to Covid-19 and that was detailed in paragraph 82 of the submitted report. Further information on the progress against budget savings was contained at paragraphs 14 to 17.


In terms of directorate variances, at Quarter Three, 24 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 detail of the variances contained in the table at paragraph 7 were set out in the submitted report:


·        Regeneration and Culture (see paragraphs 19 and 20);

·        Environment and Community Services (see paragraphs 21 to 29);

·        Public Health (see paragraph 30);

·        Adult Social Care (see paragraphs 31 to 33);

·        Education and Partnerships (see paragraphs 34 to 38);

·        Children’s Care (see paragraphs 39 to 54);

·        Legal and Governance Services (see paragraph 55);

·        Finance (see paragraphs 56 to 60); and

·        Central Budgets (see paragraphs 61 to 65).


Paragraphs 68 to 95 of the submitted report provided an update of the position as at Quarter Three 2021/22 detailing the current estimated costs of Covid-19 and the grant funding provided by the Government in 2021/22.


Information on the flexible use of capital receipts was contained at paragraphs 96 to 98 and information on revenue budget spending controls was included at paragraphs 99 to 104 of the submitted report.


As part of the Quarter Two report submitted to Executive on 9 November 2021, the Executive had approved a revised capital budget for 2021/22 of £64.814m. Following a further review and the inclusion of new additional schemes, increases to existing schemes, and the reductions to existing schemes (as detailed in paragraphs 107 to 109), it was currently predicted at Quarter Three that the Council would spend £59.035m at year-end.


The revised Investment Strategy to 2023/24 was included at Appendix 2 for approval.  The 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 at paragraph 110 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 fifteen schemes were set out in paragraphs 111 to 125. Those variances required movement within the Council’s four-year Investment Strategy, but did not affect the overall investment or cost of borrowing.


The table at paragraph 129 provided a summary comparison of the budget against the actual position as at Quarter Three 2021/22 on each of the prudential indicators adopted by the Council.


The table at paragraph 133 set out a summary of the balance of reserves and provisions at the start of 2021/22 and the projection as at year-end and further detail was provided in Appendix 3.




1.      That the 2021/22 revenue budget Quarter Three total projected outturn of £5.046m, representing a £3.225m (2.8%) overspend on non-Covid-19 elements and the estimated financial effect of Covid-19 in 2021/22 of £1.821m, 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 £5.046m in 2021/22: - Social Care Demand Reserve (£0.5m) - Children’s Services Demand Reserve (£0.732m) - Covid Recovery Reserve (£3.814m) be noted.

3.      That the implementation of the Flexible Use of Capital Receipts Strategy (approved by Council on 20 October 2021) and the projected amount of £4.9m arising from the implementation of the Strategy, being transferred to a Reserve at year-end, be noted.

4.      That the proposed revenue budget virements over £150,000 (Appendix 1) be approved.

5.      That the 2021/22 capital budget Quarter Three predicted outturn of £59.035m against a budget of £64.814m be noted, and the proposed revised Investment Strategy to 2023/24 at Appendix 2 be approved.




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: