Agenda item

(To consider a report from Michelle Grady, Assistant Director – Strategic Finance, which invites the Board to consider and comment on the Revenue Budget Monitoring Report 2020/21 - Quarter 3 to 31 December 2020, which will be presented to the Executive on 2 March 2021. The views of the Board will be reported to the Executive as part of its consideration of this item)

Consideration was given to a report from the Assistant Director – Strategic Finance, which invited the Board to consider and comment on the Revenue Budget Monitoring Report 2020/21 - Quarter 3 to 31 December 2020, which would be presented to the Executive on 2 March 2021. The views of the Board would be reported to the Executive as part of its consideration of this item. The report recommended that the Executive noted the current position on the revenue budget and decided on any corrective action necessary.

The report provided an update on revenue spending compared with budgets for the financial year which started on 1 April 2020. The tables in the report showed the actual income and expenditure for the first nine months of the financial year to 31 December 2020, along with the forecasts for spending and a comparison of the forecasts against the approved budgets. The report gave an overview of the financial position and detailed information on each budget area. The financial impact of Covid-19 and other variances arising from the "business as usual" activity were considered separately in the report, with the combined position summarised in the Overall Financial Position section.

The overall revenue position was for a forecast underspend this year of £15.378m(excluding schools and Covid-19). There was also a forecast underspend on capital financing charges of £7.868m, this was excluded from this forecast position at this stage. It was planned that the capital financing underspend would be used to manage future fluctuations in the annual capital financing budget by transferring it to the capital financing earmarked reserve. It was estimated that the forecasted Covid-19 position may not be contained within the Government's emergency grant the Council received. An overall deficit of £2.212m was forecasted.Included in the forecast was an estimated additional grant of around £4.200m which could be claimed to cover some of the Council's losses of income. The general reserves at the end of the year would remain within the target range of 2.5% to 3.5%. The impact of the revenue budget forecast on the Council's resilience had been assessed and the conclusion was that the Councils financial resilience remained strong. There were healthy reserve balances and the Council would continue to strengthen the financial resilience as set out in the report.

The following points were confirmed:

·         The Covid-19 position had changed from a forecast surplus of £7.673m in Quarter 2 to a forecast deficit of £2.212m for the end of 2020/21 between the forecast expenditure and losses and the emergency Covid-19 grant received.

·         Paragraph 1.16 – The estimated costs and losses for the first quarter of 2021/22 were currently lower than the allocated fifth tranche of general emergency grant from the Government of £15.159m to cover these costs and losses by £3.229m. Following the first tranche of grants in which the Council did quite well, the Government had since created a Covid relative needs formula which consisted of a mixture of deprivation and social care measures, and was now issuing grants based on this formula. The estimated costs and losses were currently lower than the allocated grant as they reflected what had been identified so far and the Council would continue to refine these estimated costs and losses for the first quarter of 2021/22.   

RESOLVED:

1.    That the Board support the recommendations to the Executive, as set out in the report and outlined above;

2.    That a summary of the comments made be passed on to the Executive in relation to this item.