The Assistant Director of Finance and Section 151 Officer presented a report which informed the Finance, Economic Development and Corporate Services Overview and Scrutiny Committee of the Council’s 2021/22 financial position as at the end of July 2021.
It was reported that the Council was currently projecting a General Fund deficit of circa £1m for the current financial year due to a combination of factors including income shortfalls. Reasons for this included the car parking occupancy being lower than budgeted (Grantham being 60% and Stamford being 80%) and leisure and arts facilities having been closed due to pandemic restraints. The Government’s Income Loss Compensation Scheme remained until the end of June but would not fully reimburse the Authority for income losses due to the restrictive criteria of the scheme. Other contributing factors included projected shortfall in achieving the process automations savings and securing further savings from procurement activities due to the market increases in materials and contractor availability.
It was reported that savings were being generated in some areas with underspends as a result of staff working remotely and these savings were expected to continue for the remainder of the year. Attention was also drawn to the approved criteria for the recently formed COVID recovery reserve the details of which were included in the report.
There were updated projections for the Housing Revenue Account and members attention was drawn to the revised New Build programme projections which had reduced for the remainder of the year. Finally, the Committee was reminded that the Council’s Finance Risk Register was included in the report and included a new risk to reflect the projected deficit projection.
During discussion, Members raised the following points:
A Member asked what the overall impact of Covid was in last year’s budget and in comparison to this year so far.
It was reported that the 2020/21 out-turn had shown an overall balanced position and this had been partly assisted by a range of Central Government grants and the Council taking advantage of the national furlough scheme.
A Member asked what the financial impact of the empty office space above the Cinema was for the year.
It was confirmed that £75,000 was included in the budget to meet the ongoing operational costs of holding the asset and the vacant space (including the vacant units adjacent to the cinema) was being marketed by commercial agents. No income budgets had been included in the current year’s budgets in respect of the empty units so there was no adverse financial impact on the Council.
The Committee noted that the social housing figures discrepancy looked significant and some of the figures may refer to adaptations rather than new builds. Further information would be provided to the Committee at its next meeting. The Disability Facility Grant was a demand led service and figures would continue to catch up with resources as the forecast changed.
A Member asked for an explanation of the 20% Building Control variant. It was clarified that a saving was made of this percentage, hence the variant.
A Member asked about the HRA capital forecast and welcomed the prospect of 15 new units. The Member asked if they would be subject to Right to Buy and how many properties were lost to this process in a year.
It was reported that they could not be excluded from Right to Buy but that tenants bore the cost, not the Council. It was confirmed that an average of 70 a year are sold but just 28 were sold last year.
That further information be provided to set out the difference in building costs for social housing new builds in Stamford and Bourne, at £150,000 compared to £80,000 in Grantham.
It was AGREED:
That the Committee reviewed and noted the forecast 2021/22 outturn position for the General Fund and HRA Revenue and Capital budgets as at the end of July 2021.
The Committee noted the allocation criteria of the COVID recovery reserve, the use of which had been delegated to the Chief Executive and the S151 Officer in consultation with the Cabinet Member for Finance and Resources.