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 December 2021.
The Head of Finance presented a report that provided the third update in this financial year to the Committee.
The Officer was able to report a forecast deficit as at 31 December 2021 of £528,000 – a reduction of approximately £560,000 when compared to 30 September 2021. The reduction was as a result of:
· In year vacancies in a number of service areas.
· Improved car-parking forecast income.
· Additional reduction in spending within service areas.
Further main points covered within the report included the general fund forecast outturn position at directorate level with an appendix that provided the forecast outturn along with details of significant variances for each service area.
The Head of Finance continued that the forecast deficit of £528,000 included additional workshop costs of £160,000 due to a combination of an increase in the price and quantity of consumables and external specialist repair works on end-of-life vehicles. It was confirmed that a non-key decision had been approved from the Save to Spend waste reserve which reduced the forecast deficit to £368,000.
Table 3 of the report provided a forecast outturn of significant income streams with a forecast deficit of £947,000 reduced to £817,000 following the final payment from the Income Losses Scheme. Reference was made to rows four and five of the table where the forecast outturn figures had been reported the wrong way round. The Stamford Arts Centre should read £352,000 and Building Control should read £670,000, all other figures were correct.
Paragraph 2.6 of the report provided Members with an update on the positive savings that continued to be made through the hybrid working arrangements of Council staff. Forecasts showed savings of £135,000 across a number of budget headings as highlighted in Table 4 of the report.
Section 3 of the report provided an update on the General Fund Capital Programme. Table 6 showed a forecast spend of £5.8m against a current budget of £8.7m and Table 7 provided further details on significant variances for each scheme. Budget carried forwards had been requested for some of the schemes and these would be reflected in the Budget report to Council on 3 March 2022.
Section 4 of the report detailed the forecast position of the Housing Revenue Account Budget was also included alongside a detailed breakdown. Table 9 showed a forecast surplus of £2.3m against a budgeted £3.7m. Appendix B detailed a breakdown of the HRA and comments regarding the variances shown.
Section 5 of the report provided an update on the Capital Programme and the forecast spend was shown in Table 11. A number of budget carry forwards had been requested for the HRA.
The final section of the report confirmed the collection rates for council tax business rates and HRA dwelling rents and these were monitored on a monthly basis.
Members raised the following points during the discussion that followed:
· A Member asked if the Football Foundation bid had been completed with regard to the Deepings all-weather pitch?
The Chief Executive confirmed that the football foundation bid was still moving forward. Funding had not been in place last year but will be this coming year. A further update would be provided as available.
· Has the reduction in the backlog of Void properties improved the performance in void rates?
The Director of Housing confirmed that the new voids policy contributed to the significant November reached over 100 and was now below 50.
· In reference to the Heritage action zone, there were delays in establishing a property grant scheme. What were causing these delays?
The Manager of InvestSK Ltd explained that the delays in establishing the shop front grant scheme were due to finding skilled trades-people and sourcing materials as there was a national shortage. Brexit and Covid-19 have added to these delays which may take months to overcome but was expected.
· Variances were rising – was the inflation rate used too low?
The Head of Finance confirmed that the assumptions used for budget setting were established at a specific point so it was an inherent risk that significant variations to the assumptions could have an adverse impact on the financial position. However, there was an established risk register that models the variations to the financial assumptions to assess the financial exposure.
Further questions were asked in relation to the Council’s commitment to large funding programmes and the fluctuations in Business Rates to which the Head of Finance responded.
The Committee noted the forecast 2021/22 outturn position for the General Fund and HRA Revenue and Capital budgets as at the end of December 2021 and identified any variances that required further action or investigation and any specific actions or interventions were considered in order to reduce the General Fund forecast deficit.