Issue - meetings

(To receive a report from the Executive Director – Resources which describes the Council's financial performance in 2020/21 and reports on underspends on budgets and makes proposals on the carry forward of over and under spends into the current financial year 2021/22)

That Executive:

1.    Notes the carry forwards set out in paragraph 1.58 to 1.60 of the report, which are made in line with the Council's Financial Regulations;

2.    Recommends to the County Council that the proposals in paragraph 1.61 to 1.65, relating to the treatment of underspends, be approved subject to the following amendments:

a)    The proposed transfer to the Financial Volatility Reserve set out in paragraph 1.64 is reduced by £10m to £2.2m;

b)    A corresponding £10m increase to the Development Fund, for use on highways initiatives.

3.    Notes the transfers to and from reserves carried out in 2020/21 as set out in Table F;

4.    Notes the financial performance in 2020/21 as set out in Table A (Key Financial Performance Measures), Table B (Revenue Budget Final Outturn), Table C (Net Capital Programme Summary Outturn), Appendix N (Prudential Indicators).

Consideration was given to a report, which was presented by the Executive Director – Resources and Assistant Director – Finance, on the Council's financial performance in 2020/21, which included and overall underspend of £28.746m on Council budgets and £13.976m on schools budgets.  The report also identified and explained variances from the Council's revenue and capital budgets.  Prudential and financial performance indicators for 2020/21 were also included.

Proposals for the use of underspends which were in excess of the 1% approved budget from 2020/21, in the current financial year (2021/22) were set out in paragraphs 1.61 to 1.65 of the report.  These would be submitted to the County Council for approval.

The Chairman of the Overview and Scrutiny Management Board presented the comments from the Board, which had included reference to the continuing cost pressures from Home to School transport; the proposed investment in capital for special schools; pressure points in certain services, such as foster care, which had been created by the Covid-19 pandemic, and it was suggested that these should continue to be monitored by the relevant scrutiny committees.

The Leader of the Council highlighted the significant amount of financial support which had been received by local government in response to the Covid-19 pandemic.

The Executive was advised that it was likely that there would be a one year financial settlement for local government again, and there may be further challenges for local government in the coming years as a result of the pandemic.  The advice was that the authority should keep the volatility fund at a reasonable level.

The following issues were raised:

·         The additional funding received to assist the authority in dealing with Covid-19 had been of benefit, and had helped residential homes to continue operating and supporting people.

·         The entire staff of the Council should be thanked for their hard work over the past 15 months.

·         Reservations regarding the future finances were shared by members of the Executive, and it was commented that the recovery phase would take 2 – 3 years, and so a careful approach to funds was the correct one to ensure that there was a sensible amount of reserves.

·         There would be challenges around construction costs and pay inflation, as well as a skills shortage in the county.

·         It was noted that the Council currently had a healthy level of reserves, and as a result the Council had been able to use £12m to establish a business support fund earlier in the year.  There had been clear messages in the lead up to the election that more investment in the county's roads was needed.

RESOLVED

That Executive:

1.    Notes the carry forwards set out in paragraph 1.58 to 1.60 of the report, which are made in line with the Council's Financial Regulations;

2.    Recommends to the County Council that the proposals in paragraph 1.61 to 1.65, relating to the treatment of underspends, be approved subject to the following amendments:

a)    The proposed transfer to the Financial Volatility Reserve set out in paragraph  ...  view the full minutes text for item 15