Agenda item

The Cabinet Member for Finance, Performance and Core Services presented a report on the Council’s revenue budget monitoring position for the 2021/22 financial year as at 31 July 2021 (period 4) and the capital budget position for quarter 1.

The Cabinet Member explained that there remained a considerable degree of uncertainty across both the UK and global economies which would continue to impact on local government finances.  The COVID-19 pandemic and the effects of Brexit had put even more pressure on services and led to delays in construction projects and increased costs due to supply issues and labour shortages, all of which had impacted on the Council’s revenue and capital budgets. 

The Council’s General Fund revenue budget for 2021/22 was £173.614m but, as a consequence of all those factors, the forecast outturn position at the end of July projected a net overspend of £9.712m.  It was noted that although the Council had added a net £17.817m of growth to the 2021/22 budget and prudently set aside a specific Budget Support reserve of £11.433m, a worsening of the overspend position could require a drawdown from the £17m available in the main General Fund reserve.  The Cabinet Member highlighted some of the main areas of overspend which were presented in a new format to Cabinet, aimed at providing greater clarity on the key risks, mitigations and opportunities across service areas.

The overall Capital Programme for 2021/22 was £411.511m, consisting of £61.926m for the General Fund, £306.370m for Investments and £43.215m for the Housing Revenue Account (HRA), and expenditure at the end of the first quarter was £71.349m.  The Cabinet Member referred to a number of proposed changes to and reprofilings within the overall programme and, following on from his earlier comments regarding the rise in construction costs, advised on an additional £3.97m that was required to support the delivery of the Industria (Intensifying Barking’s Industry) Programme.

Cabinet Members discussed the challenges being faced at the moment and expressed their criticism of the Government for increasing National Insurance contributions and forcing local authorities to increase Council Tax to support social care, which would impact on the disposable income of every resident of the Borough.  The Cabinet Member for Social Care and Health Integration drew particular attention to the misinformation coming from Government relating to the extra funding to ‘solve’ the NHS and social care problems and referred specifically to the Government’s rhetoric that individuals would not now be expected to pay over £86,000 during their lifetime towards their care.  While the Cabinet Member welcomed the cap on care costs, she made clear that it only related to the direct provision of care services and would not apply to the provision of, for example, accommodation, meals and laundry services, which would mean that those in care homes would continue to be expected to contribute up to a further £20,000 per year towards their overall service provision.  The Cabinet Member for Educational Attainment and School Improvement also advised on the significant financial pressures being faced by many primary schools across London due to falling pupil numbers and the resultant loss of funding.

Cabinet resolved to:

(i)  Note the projected revenue outturn forecast for the 2021/22 financial year, as set out in sections 2 and 3 and Appendix A of the report;

(ii)  Note the update on key savings programmes and commercial income, as set out in section 4 of the report;

(iii)  Note the 2021/22 Quarter 1 Capital Programme expenditure position, as set out in section 5 and Appendices B and C of the report;

(iv)  Approve the changes to the Capital Programme totalling £22.745m and £10.669m reprofilings, resulting in a net increase to the current year’s programme of £12.076m, as set out in paragraphs 5.1 - 5.3 and 5.6 - 5.10 of the report; and

(v)  Approve an increase in the Industria programme budget of £3.97m, in light of the tender returns, to a total development budget of £38.618m, as set out in paragraphs 5.4 - 5.5 of the report.