Agenda item

(To consider a report fromTony Warnock - Head of Operations and Financial Advice, on a Review of Financial Performance 2020/21, which is being presented to the Executive on 6 July 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 Head of Operations and Financial Advice, on a Review of Financial Performance 2020/21, which was being presented to the Executive on 6 July 2021. The views of the Board would be reported to the Executive as part of its consideration of this item.

The report described the Council's financial performance in 2020/21 and reported on the underspend of £28.746m on Council budgets and £13.976m on Schools budgets. It also identified and explained variances from the Council’s revenue and capital budgets and made proposals on the carry forward of over and under spends into the current financial year 2021/22 and reported Prudential and Financial Performance Indicators for 2020/21.

Net revenue spending amounted to £488.644m, excluding Schools Budgets. Net capital spending totalled £52.235m. Existing policies required all over and underspends up to 1% on service budgets and over and underspends on capital, schools budgets and shared services to be automatically carried forward. The carry forwards and transfers to earmarked reserves had been proposed in accordance with existing policy. The treatment of all other underspends and overspends was a matter for the full Council and the report set out proposals for how these should be dealt with. General reserves currently stood at £16.200m with a further £40.483m in the Financial Volatility earmarked reserve.

The report recommended that the Executive: Note the carry forwards set out in paragraphs 1.58 to 1.60 which were made in line with the Council's Financial Regulations; Recommend to the County Council that the proposals in paragraphs 1.61 to 1.65, relating to the treatment of underspends, be approved; Note the transfers to and from reserves carried out in 2020/21 as set out in Table F; Note 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).

Members discussed the report, and during the discussion the following points were noted:

·         Home to School Transport continued to create a cost pressure and was being closely monitored. Due to the Covid-19 pandemic, the summer term of 2020 had resulted in an underspend, but when schools returned in September the costs increased again. A re-base of £5m in the home to school transport budget took place for 2021/22 due to the higher costs per day for transport. This budget was volatile due to the pandemic impact and market pressures, and a constant high risk area to the Council. The 1% carry forward and the Covid-19 funding grants would be utilised to manage the cost pressure going forward. The revised budget, including the increase, seemed reasonable for the end of this current financial year, but would be monitored. A review of home to school transport to look at improvements, how to manage market providers and commissioning services, had been commissioned using independent consultants. This was now drawing to a close and would be brought to the Children and Young People Scrutiny Committee for consideration.

·         The low assurance for the Mosaic system for Adults and Children's social care should improve as there were now better processes, governance and project planning in place.

·         The £86m investment in capital for special schools would create additional places for pupils with SEND and ensure all special schools could meet all needs in their local communities for the majority of pupils with SEND, as set out in the Building Communities of Specialist Provision Strategy.

·         The Covid-19 pandemic had created a number of pressure points in certain service areas. The first pressure point was in relation to foster care as some older and vulnerable foster carers withdrew, which meant some young people had to be placed out of county which was more expensive. The Council was looking to move these young people back as soon as possible into their local communities and Children's Services was trying to increase the number of foster carers. The second pressure point was placements for adults with learning disabilities and the Council was working to return these adults to their local communities. The third pressure point was waste which had seen an increase in household waste due to more people being at home. This should eventually decrease but would take time to get back to normal levels. The Covid-19 recovery reserve fund would be used to help to cover these pressure points as there was caution about the level of funding for Covid-19 which would be received from the Government in future. It was suggested that the relevant scrutiny committees should monitor these pressure points.

·         The level of capacity of staff and partners during the pandemic had been a challenge. It was acknowledged that the work of the staff during the pandemic had been exemplary.

·         It was recognised that post pandemic, the Council would still face many challenges and reassurance was provided by the Chief Executive that the Council was flexible enough to respond to these challenges.

·         Further information on the post pandemic challenges and on specific proposals for responding to them would have been useful, and on the Council's flexibility to meet the future challenges. The Board requested that further information on the challenges, proposals and the Council's flexibility be included in the next budget monitoring updates.

·         A specific amendment had been agreed at the County Council meeting in February 2021 which enabled the Council to use some of the Financial Volatility Reserve to create the Support to Businesses earmarked reserve. It was proposed to top the Financial Volatility Reserve back up to its previous level by using some of the 2020/21 underspends. There was a need to keep a reasonable level of reserves due to the uncertainty over future funding from the Government and the Covid-19 pandemic. It was noted that the County Council was in a better financial position that other councils and because of this could plan services and make timely and sensible decisions rather than make rapid cuts to services and budgets.

RESOLVED:

1.      That the Board support the recommendation to the Executive as outlined above and in the report;

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