Agenda item

The Executive Member for Finance and 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 year-end 2021/22, including the effect of Covid-19 on the Council’s finances.

As reported in previously, the Covid-19 pandemic had impacted significantly on the Council’s financial position during 2021/22 and would continue to in a number of areas in future years. 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.

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 overall final year-end revenue outturn position for 2021/22 for non-Covid19 expenditure was a £2,325,000 underspend. The details of that were shown in the table below paragraph 10 of the submitted report, including the split by directorate.

It was proposed that the £2,325,000 underspend on non-Covid19 expenditure be initially transferred to the General Fund Reserve. The level of reserves remaining after the use and creation of those reserves was shown in the ‘Reserves and Provisions’ section of the submitted report (see paragraphs 158 to 163) and in Appendix 2.

In terms of directorate variances, those were set out at paragraphs 23 to 83. At year-end, 38 areas had 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 MTFP.

The financial impact of the Covid-19 pandemic in 2021/22 was summarised in paragraphs 84 to 111 of the submitted report. There had been a financial pressure due to Covid-19 of £390,000 in 2021/22.

In terms of the capital budget outturn 2021/22, following a further review and the inclusion of new additional schemes (see paragraphs 125 and 126 of the submitted report), increases to existing schemes, and the reductions to existing schemes (as detailed in paragraph 123), the Council had spent £56.899m at year-end. The reasons for the underspend to the revised capital budget for 2021/22 and any changes required to the Investment Strategy were provided in the paragraphs 122 to 150. The revised Investment Strategy to 2024/25 was included at Appendix 1.

The Council’s total borrowing increased from £205.2m at 30 December 2021 to £208.8m at 31 March 2022. Further information on borrowing and prudential indicators was detailed at paragraphs to 151 to 157.

ORDERED

1.      That the 2021/22 revenue budget initial year-end outturn, of a £2.462m overspend on non-Covid-19 elements, be noted.

2.      That the implementation of the Flexible Use of Capital Receipts Strategy totalling £5.017m in 2021/22, as approved by Council on 20 October 2021, be noted.

3.      That the transfer of £230,000 of the Public Health Directorate underspend relating to the sexual health service to the Public Health Reserve be approved.

4.      That the 2021/22 revenue budget final year-end outturn (following the Flexible Use of Capital Receipts and transfer to Public Health Reserve), of a £2.325m underspend on non-Covid-19 elements, be noted.

5.      That the financial effect of Covid-19 in 2021/22, of £390,000, be noted.

6.      That the following transfers to reserves be approved:

a.      Covid-19 expenditure incurred during 2021/22 to the Covid Recovery Reserve (£390,000);

b.     the remaining balance on the Covid Recovery Reserve to a new specific earmarked Car Parking Pressures Reserve (£782,000) and the General Fund Reserve (£3,340,000); and

c.      the final year-end outturn underspend on non-Covid-19 expenditure to the General Fund Reserve (£2,325,000).

7.      That the creation of a new specific earmarked Social Care Transformation Reserve to help support the on-going effects of the significant and continued transformation work taking place within Children’s Services be approved, and also that which was planned to take place within Adult Social Care regarding the Fair Cost of Care and Social Care Reforms, and the transfer of £5,665,000 to the Reserve from the General Fund Reserve be approved.

8.      That the transfer of the following reserves into the new specific earmarked Social Care Transformation Reserve be approved, making a total of £7.072m available for the required transformation:

a.      Children’s Services Improvement Reserve (£175,000);

b.     Children’s Services Demand Reserve (£732,000); and

c.      Social Care Demand Reserve (£500,000).

9.      That the 2021/22 capital budget final year-end outturn of £56.899m against a revised capital budget of £59.035m be noted, and the revised Investment Strategy to 2024/25 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.