Agenda item

The Cabinet Member for Finance, Performance and Core Services presented a report on the Council’s revenue and capital budget monitoring position for the 2020/21 financial year as at 31 July 2020 (period 4).

The Cabinet Member advised that the Council was facing significant financial pressures due, in the main, to additional costs, loss of income and delays to the delivery of some planned savings proposals as a direct consequence of the COVID-19 pandemic.  The Council’s General Fund revenue budget for 2020-21 had been set earlier in the year at £155.796m and the position at the end of July 2020 showed an underlying budget variance of £8.533m.  However,  current year-end projections gave a range of overspend of between £5.42m at the most optimistic end to £18.9m at the more pessimistic (although still entirely possible) end, even after taking into account committed Government grant funding of £21.43m.  Any level of overspend would need to be funded from reserves and the Cabinet Member referred to section 7 of the report which set out how those varying levels of overspend could be funded in the short-term. 

The delivery of the Council’s Capital Programme had also been impacted by COVID-19 and a recent review of projects had identified that the original budget of £381.239m for 2020/21 should be reduced to £288.571m, with the difference being reprofiled to future years.  The Cabinet Member stressed however that growth, innovation and transformation continued to be key to the successful delivery of the Council’s ambitions and he was pleased to report that projects led by Be First, the Council’s regeneration company, were progressing very well in the circumstances.

The Housing Revenue Account (HRA) was showing a forecast overspend of £1.2m against the budget of £92.166m at the end of July 2020, with a further income risk of £4.6m as a result of COVID-19.  It was noted in particular that rent collection levels were approximately £2m below expectations at the end of June.

Members discussed the financial pressures and noted that difficult decisions would need to be made to reduce the level of overspend, particularly if the country returned to COVID-19 lockdown arrangements.  The Cabinet Member for Social Care and Health Integration stressed, however, that the Council was committed to protecting the most vulnerable in the community and referred to recent communication with Government Ministers regarding transport provision for pupils with special educational needs and disabilities (SEND) during the current pandemic.  The Council had sought additional funding to enable transport to continue to be provided under social distancing requirements but the Cabinet Member was appalled to receive a response that suggested that the Council should continue to fill the buses to capacity.  As such a move would put already vulnerable people at further risk, the decision was taken that the Council would directly fund new arrangements.  The Leader reiterated the point that there was a clear disparity between how the Council valued people’s lives in comparison to the Government.

Cabinet resolved to:

(i)  Note the overall financial risks and issues outlined in the report, including both the underlying issues and those arising from the COVID-19 pandemic and lockdown;

(ii)  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;

(iii)  Note the update on key savings programmes, as set out in section 5 of the report;

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

(v)  Agree the revised Capital Programme for 2020/21 and note the Quarter 1 expenditure position, as set out in section 9 and Appendix B to the report.