Issue - meetings

The Cabinet Member for Finance, Performance and Core Services presented a report on the Council’s revenue budget monitoring position for the 2020/21 financial year at 30 September 2020 (period 6).

The Cabinet Member introduced the report by referencing the recent events in the London Borough of Croydon which, following a report from external auditors on 21 October, had been issued a Section 114 Notice due to significant financial problems.  He pointed out that whilst it would seem that some of Croydon’s financial problems were of its own doing, what it did highlight was the extremely difficult and challenging financial environment that all local authorities had faced for many years due to a decade of Government austerity measures and the pandemic was the tipping point for Croydon.  He added that for many authorities including Barking and Dagenham, the full effects of Covid-19 were still to be felt and that there would be difficult financial times ahead.  He was confident, however, that Barking and Dagenham would not face the same position as Croydon due to this Council’s robust governance and financial management over recent years which was underpinned by the plan of growth and investment.

The Council’s General Fund revenue budget at the end of period 6 indicated that despite the continuing economic impacts of COVID-19, including the lockdown, and the high level of additional costs and pressures including loss of service income from fees and charges, the underlying budget variance was £5.525m, which represented an improvement on the period 6 position.

Another tranche of non-ringfenced grant support funding for Local Government was announced in mid-October, taking the total allocation for Barking and Dagenham to £22.56m, plus £1.363m which was expected as compensation for the loss of income.  The Cabinet Member stated that after taking into account the significant financial pressures stemming from the COVID-19 pandemic, current year-end projections gave the potential range of outturn variance of between £1.525m and £10.465m which was a narrowing of the range since last month. In practice it was likely to fall between those extremes with a likely overall variance of £5.987m which would be met by using a combination of reserves, efficiency savings, short term cost reductions and maximising income subject to Covid-19 restraints.

The Cabinet Member summarised the budget monitoring position across the range of services including the additional Covid pressures, the current forecasted position of the Housing Revenue Account (HRA), the level of reserves, details of the key savings programme, the Council Companies and particularly the returns and expected dividends due to the Council in the light of Covid, and finally an update on the Dedicated Schools Grant (DSG).

Cabinet resolved to:

(i)  Note the projected revenue outturn forecast for the 2020/21 financial year as set out in sections 2 to 4 and Appendix A of the report and the potential impact on the reserves position as set out in section 7 of the report;

(ii)  Note the update on key savings programmes, as set out in section 5 of the  ...  view the full minutes text for item 43