Agenda item

Report of the Cabinet Member for Finance and Resources to inform the Committee of the Council’s forecast 2020/21 financial position, as at the end of December 2020

The Interim Director of Finance introduced the report of the Cabinet Member for Finance and Resources that provided an update on the Council’s 2020/21 financial forecast position as at the end of December 2020. The Committee would receive the outturn report for the final quarter at a future meeting of the Committee.

The Committee was informed that the forecast showed a projected deficit of £300k as at, 31 March 2021. Reference was made to the impact on income levels due to the pandemic and Members were advised that the compensation schemes and reimbursements from the Government did not wholly meet the income losses from areas such as car parking and art venues.

Work was being undertaken to try to achieve a balanced position by the end of the financial year but due to the volatility of the current situation an element of caution on achieving this was given.  Members were reminded that should the final position be a deficit then the Stabilisation Reserve would be used to ensure a balanced position at the end of the financial year.

A summary of the report was given to Members and the following points were highlighted for noting:

• There had been no significant changes since the last report.
• The additional £116k of Disabled Facility Grant funding secured by the Council did not need to be reimbursed to Government at the end of the financial year.  Any funds not fully utilised prior to year-end would be transferred to a reserve funding allocation.
• Business Grants totalling £38.5m had been awarded by the Council to eligible local businesses in accordance with the various Government’s business support schemes.
• The Council would continue to play a supporting role as further grant tranches became available to cover the continuation of lockdown up to 14 April 2021 when it was expected that non-essential businesses would re-open.

·       In July 2020 Council had approved funding of up to £750k to support and fund payments for One Life, the leisure provider, during the closure period to the end of December 2020. The final payments were still to be ratified but were estimated to be around £100k less than predicted.

• The HRA new build programme showed that the anticipated spend was now just over £3m rather than the anticipated £27.4m forecast in the original 2020/21 budget. The underlying reasons for the pause in the programme would be identified but the focus would now be on the new financial year.  Members would receive details of the new build programme for the new financial year in due course. 

Members sought clarification on:

The Review of the safety and property inspections, how had costs and resources been identified, had a detailed analysis on the amount of work outstanding been done and how much had been allocated to the task.

The Interim Director for Finance noted that the housing service challenges were highlighted during the budget setting period.  Members would be asked to consider at Council next week additional funding that would ensure the Compliance Action Plan could be delivered within the agreed timelines. Assurance was given that the financial implications had been built into the budgets. 

A Member queried profiling of expenditure forecasts between quarterly reporting. There had been a question regarding the profiling of capital costs as these had been previously allocated to period 12 each financial year. When the actuals had been compared to the profiles, there had been a mismatch between actual costs incurred to date and the profiled budget.  This had now been corrected to provide Members with more comparative information.

A Member commented that the pandemic might be used as a reason for inaction and queried why only around £3m of the predicted £27m had been spent on housing. The Chief Executive noted that the improvement plan, the Regulatory Notice, and details of the actions taken had been shared with all Members. She assured Members that there had been openness and transparency. Timely actions had been taken to allocate the right resources and ensure that the initial processes were in place to comply with the Compliance Action Plan.

The Chairman referred to Table 1 regarding the Cash flow forecast and sought assurance that the cash flow was being managed and what actions had been taken to keep the cash balances at appropriate levels.

To comply with good practice, creditors were paid within 30 days.  Members were informed that it was not unusual for the Council to experience a reduction of income levels during January, February, and March due to the nature of income.  To offset these cash flow movements, funds from the Council’s Money Market, banks and building society investments would be transferred to the cash accounts to ensure there was a positive position for the day to day running of Council business.

The Chairman thanked the Finance Team for the level of detail contained within the report, and the contents were noted.