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 August 2020 (period 5).

The Council’s General Fund revenue budget at the end of period 5 showed an underlying budget variance of £5.701m, which represented a significant improvement on the period 4 position of £8.533m.  However, current year-end projections, after taking into account the significant financial pressures stemming from the COVID-19 pandemic in relation to additional costs, loss of income and delays to the delivery of some planned savings proposals, gave a range of overspend of between £5.816m and £18.303m. 

The Cabinet Member pointed out that while the term ‘overspend’ was commonly used to refer to expenditure that exceeded budget provision, it was an inappropriate term to explain the Council’s position in the current circumstances as the Government had failed to provide the proper level of financial support to the local government sector to enable it to meet the challenges and extra costs associated with the COVID-19 pandemic.  He also referred to the Government’s austerity programme that had severely impacted local authority budgets for over 10 years, the need for a genuine Fair Funding policy for local authorities and the impact of welfare system reforms on an increasing number of residents.

The Housing Revenue Account (HRA) was showing a forecast overspend of £2.193m at the end of period 5 and the Cabinet Member referred in particular to the likely need to increase bad debt provision as a result of the pressures being faced by tenants as a consequence  of COVID-19. 

The report also set out a proposal to classify expenditure associated with transforming service delivery in the areas of Adults, Disabilities and Mental Health services under the Flexible Use of Capital Receipts arrangements.

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 report;

(iii)  Note the update on the impact of COVID-19 and the lockdown, as set out in section 6 of the report; and

(iv)  Agree that the Flexible Use of Capital Receipts should be extended to include funding for the Adults, Disabilities and Mental Health Improvement Programme as set out in section 9 of the report.