Agenda item

Budget Monitoring Report - Period 1 April - 30 September 2021

To inform Finance, Economic Development and Corporate Services Overview and Scrutiny Committee of the Council’s forecast 2021/22 financial position as at the end of September 2021.



The Assistant Director of Finance presented a report that provided an update on the Council’s financial position during the current financial year.  The report was to monitor and forecast the budget against the current economic conditions that were facing the Council.


It was noted that there was a slight deterioration in the deficit but the forecasting work that has recently been undertaken during October was more positive and it was expected that the Council would progress to a reduced deficit position at March 2022.   The Committee were informed that income reduction rather than over-expenditure was the reason for the deficit as key income areas are still performing below budgeted levels.  It was confirmed that the Government had introduced an income-loss compensation scheme which finished after the first quarter of the current financial year so further income losses would directly affect the Council’s overall finances.


It was explained that staff were continuing to work on a hybrid basis, between home and office and this had reduced some costs such as travel claims for business and postage and printing costs.  A reduction of £92,000 had been made in this respect and it was expected this reduced level of expenditure would continue in the future. 


In reference to collection rates, the Assistant Director of Finance confirmed that the collection was in line with targeted profile.  However, it was acknowledged that Business rates collectable amounts had been greatly affected due to Government changes in reliefs awarded to eligible businesses. 





During discussion, Members raised the following points:


·            Income received from Grantham car parks had been particularly low (and to a lesser extent, Stamford), even though there had been a 10p increase since April 2021.  A Member asked if the reduction in income received was purely due to the Pandemic or were charge increases also an influence?   


·            It was noted that car park payment machines were frequently out of use and this was perhaps a further factor in the low usage levels.  It was further acknowledged that people were likely to have tried to park in nearby streets to avoid charges so as to save money and even pre-pandemic, people were increasingly shopping online rather than travelling into town centres.


·            A Member asked if a figure for the cost of Covid to the Council could be confirmed to date.


·            A Member noted that the pandemic would most likely influence revenues for years to come and a period of adjustment should be expected.


·            A Member informed that the financial risk register should have been reviewed and updated to ensure it continued to include all of the relevant financial risks facing the Council.  


·            A Member asked about the housing new build programme and enquired as to what lessons had been learnt from the Authority’s inability to deliver the plans.


·            Was the Government Support during the pandemic sufficient and was any further funding likely to be made available in the event of a further wave of infection?


The Director of Housing and Property acknowledged that as a strategic housing Authority, an ambitious programme was desirable but plans had to be realistic in terms of financial capacity to deliver and the situation had changed within the last year or two. 


The Assistant Director of Finance explained to the Committee that it was not necessarily possible to separate and clarify the reasons for the income reduction particularly the distinction between the pandemic impact and the adverse impact of the charge increases.  April 2021 saw an increase in car park charges but the country had been in lockdown at this time.  It was confirmed that the impact of income losses was consistent with other authorities hence the need for the Government’s income losses scheme.  The Officer further confirmed that when charges were previously increased, such a reduction hadn’t materialised, which appeared to suggest that Covid had some adverse impact on revenue levels.


It was explained that a definitive figure confirming the overall cost of the pandemic would be difficult to show accurately as behaviours of the public have changed in a number of ways and the reasons were difficult to measure.  However, subjective calculations could be carried out.  Going forward, budget levels were to be adjusted taking into consideration the current economic and customer usage profile.


The Committee were informed that the Income Loss Scheme formed by the Government was not sufficient to cover all Local Authority losses.  It amounted to the reimbursement of 75p for every £1 lost.




a)         The Committee reviewed and noted the forecast 2021/2022 outturn position for the General Fund and HRA Revenue and Capital budgets as at the end of September 2021 and identified any variances that required further action or investigation.


b)         The Committee recommended any specific actions or interventions that should be considered in order to reduce the General Fund forecast deficit.


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