Agenda item

Purpose of report

To provide Cabinet with the detail of the Council’s provisional outturn position for the financial year 2021/22, covering the General Fund Revenue Budget, Housing Revenue Account Budget and Capital Programmes for the General Fund and Housing Revenue Account.

Decision

That Cabinet:

1.    Recommends to the Governance and Audit Committee approval of the provision position for the financial year 2021/22.

2.    Approves the budget carry forwards set out in Appendices D and H.

3.    Recommends to the Governance and Audit Committee the following reserve movements in respect of the General Fund:

The balance of the Covid Recovery Reserve of £1.286 million to be transferred to the:

·         ICT Reserve increase by £0.202 million

·         Waste and Recycling Reserve increase by £0.084 million

·         Creation of an Inflation Reserve to £0.500 million

·         Invest to Save Reserve increase by £0.500 million

Alternative options considered and rejected

No alternative options were considered.

Reason for decision

The report provided detailed information relating to the following areas:

·         General Fund Revenue Budget

·         Housing Revenue Account Budget

·         Capital Programmes for the General Fund and Housing Revenue Account

·         Reserves

The Finance, Economic Development and Corporate Services Overview and Scrutiny Committee had considered this report at its meeting on 27 June 2022 and supported the recommendations contained within it.

The backdrop of the 2021/22 financial year had been one of continued uncertainty, with the beginning of the financial year seeing the country still in lockdown and restrictions in place which had an impact on the Council’s income in many areas, especially markets, arts and car-parking revenue in the first quarter and additional cost pressures.

Overall, it was reported the outturn report was favourable and there was not a deficit on the General Fund Revenue Account.

The Covid Reserve, which had been established to protect the Council’s finances from unexpected costs, could now be closed and it was recommended that the balance be redistributed to other reserves to bolster balances for the future. The proposal to create an Inflation Reserve would provide financial resilience to inflationary pressures, utility increases and fuel increases. £500,000 was recommended for inclusion in the Inflation Reserve at this time, but it was highlighted it was not possible to confirm at this stage whether this would be sufficient. Over the course of the year further modelling and forecasting would be undertaken. It was reported that the same pressures were relevant for the Housing Revenue Account and these would be funded from the Housing Revenue Account reserves as and when required.

Capital reserve balances for the General Fund left the Council with the option to fund capital expenditure by using its revenue reserves or undertake borrowing. The Cabinet Member for Finance and Leisure was hopeful that capital receipts would be achieved in the medium term, enabling reserves to be replenished and acting as a funding source for the future.

The following comments were noted during discussion:

·         Despite the significant challenges experienced with regard to lockdown, reduced income and unexpected costs, there had been no adverse effect from a financial position in respect of achieving a balanced budget. The Cabinet Member for Finance and Leisure and Officers were thanked for their excellent stewardship of the Authority’s finances. The Finance, Economic Development and Corporate Services Overview and Scrutiny Committee was also thanked for its role in monitoring the budget

·         The Inflation Reserve was to be welcomed in the current climate

·         A number of Councils were in the unfortunate position of issuing Section 114 Notices, something this Council was not at risk of due to the excellent way in which its finances were managed