Agenda item

(To receive a report by Michelle Grady, Assistant Director – Finance, which invites the Board to consider a report on the Revenue Budget Monitoring 2021/22, which is due to be considered by the Executive on 07 September 2021. The views of the Board will be presented to the Executive as part of its consideration of this item)

Consideration was given to a report by the Assistant Director – Finance, which invited the Board to consider a report on the Revenue Budget Monitoring 2021/22, which was due to be considered by the Executive on 07 September 2021.

The Assistant Director – Finance highlighted the key areas for the revenue spending compared with budgets for the financial year, noting that the overall revenue position was forecasting an underspend of £1.194m (excluding schools and Covid-19) for 2021/22. It was estimated that the forecasted Covid-19 position may not be contained within the Government's emergency grant the County Council had received.

Members were advised that forecasts showed an overall deficit of £5.897m, and that 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 it had been concluded that the Council's financial resilience remained strong. With a healthy reserve balance, the Council continued to strengthen their financial resilience as set out in paragraph 1.22 of the Executive Report.

Members were invited to consider and comment on the report, in which the following points were noted:

• The forecasted overspend of £5.897m in relation to Covid-19 was mainly in the capital programme and was due to the increased costs arising from the supply and demand of materials and labour.  This cost pressure would be kept under review and consideration would be given to deferring other capital schemes to keep within the allocated budget.
• A number of the capital projects and programmes were in Corporate Property and Place where construction was a key element. There were several issues affecting these schemes, including inflationary costs of between 7% and 10% for some raw materials and supply issues. It was unclear as to whether the supply issues were a temporary blip due to a combination of the Covid-19 pandemic, Brexit, and the Suez Canal blockage, or would continue for some time. In addition, there was a huge growth in construction in the US which was impacting on the availability of materials. A report on the supply issues and the significant impact on the delivery of the capital programme would be produced shortly.
• Insurance premium costs were increasing rapidly, as there was a lot of uncertainty in the industry and it had been noted that many of the Council's Adult Social Care providers were experiencing increased premiums. The Council was due to re-procure its insurance contract in 2021 but had extended the current contract by two years to let the insurance market settle back down. The Insurance Officer would be looking at options for keeping the premium increase as low as possible and the Council would consider the whole market to ensure it was receiving the best value premium.
• The forecast overspend arising in Lincolnshire Fire and Rescue (LFR) was due to the cost of covering long term sickness. Sickness rates in LFR were higher than other areas of the Council. The Chief Executive agreed to provide a briefing paper to the Board on the sickness figures in LFR.
• The Covid Winter Grant Support for Families was in relation to the free school meals funding received for families following the campaign by the professional footballer Marcus Rashford. The funding was distributed to schools so that they could identify which families should receive the vouchers, and also to the district councils to provide grants to vulnerable people. In addition, schemes were set up through the voluntary sector for people to purchase white goods.
• The underspend within Special Educational Needs & Disabilities (SEND) was due to staffing vacancies in the team which process Education, Health and Care Plans (EHCP). The Council was facing cost pressures in relation to the High Needs Block, but not as severe as other councils. Work was being undertaken to lessen this pressure by reducing the number of out of county placements. In addition, the Building Communities of Specialist Provision Strategy and the High Needs Transformation Programme would help to address the pressure on the High Needs Block. One strand of the High Needs Transformation Programme was to ensure that early access to specialist advice was provided so that the child's needs were appropriately catered for. The Chairman of the Children and Young People Scrutiny Committee highlighted that the Committee had been pleased to see the progress made with the Building Communities of Specialist Provision Strategy since 2018 and that the work was being recognised nationally. The Board was pleased to hear that the Council had been shortlisted for a national award.
• The planned budgetary savings were forecast to be achieved, and had been identified due to necessity. Some of the savings were income related, namely due to annual increases in charges. In relation to the adult charging planned saving of £1.8m, this was due to the service being provided to more people which generated more income. The charge would also increase to reflect any rising costs to provide services, such as from the national living wage. The Council had worked with Serco to improve the time taken to conduct assessments for financial contributions.
• The revenue spend on Highways was to address issues such as road safety, potholes and verges. Highway improvements were part of the capital programme. An extra £12m had already been added to the revenue budget and the financial outturn 2020/21 report to the County Council in September 2021 would be recommending that additional funding should be set aside for highways schemes. The Council's spending on highways was in excess of the Government's suggested spend.
• The cost of disposing fly tipping waste would be borne by the County Council, whereas the district councils would be responsible for collecting it.

RESOLVED:

1)      That the Board support the recommendation to the Executive as set out in the report;

2)      That a summary of the comments made, as set out above, be passed on the Executive in relation to this item.