Agenda item

(To receive a report from the Executive Director – Resources, which describes the Council’s financial performance in 2021/22 and reports on underspends on budgets and makes proposals on the carry forward of over and under spends into the current financial year 2022/23)

1.    That the carry forwards set out in paragraphs 1.56 to 1.61 and the transfers to reserves set out in paragraphs 1.62 and 1.63 of the report, which are made in line with the Council’s Financial Regulations be noted.

2.    That the proposals in paragraphs 1.65 to 1.67 and Table E, relating to the treatment of the underspend remaining after the carry forwards referred to in paragraph 1 above, be recommended to the County Council for approval.

3.    That the transfers to and from reserves carried out in 2021/22 as set out in Table C of the report, be noted.

4.    That the financial performance in 2021/22 as set out in Table B (Key Financial Performance Measures), Table C (Revenue Budget Final Outturn), Table D (Net Capital Programme Summary Options) and Appendix M (Prudential Indicators), be noted.

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 2021/22, which included an overall underspend of £13.582m on Council Budgets and £17.214m on Schools budgets.  The report also identified and explained variances from the Council’s revenue and capital budgets.  Prudential and financial performance indicators for 2021/22 were also included.

Proposals for the use of underspends which were in excess of the 1% approved budget from 2021/22, in the current financial year were set out in paragraphs 1.65 – 1.67 of the report and would go forward to Council in September for approval.

The Assistant Director – Finance summarised the report and highlighted a number of points to the Executive.  She advised that Table C of the report set out information in relation to the Revenue Budget and gave a breakdown by service area.  She reported that during 2021 the Council continued to receive Covid-19 grants, and it was noted that all of the general grant had been used during 2021-22, and the Council had been advised that this would not continue into 2022-23 even though the impacts of the pandemic would continue to filter through.

It was reported that the majority of variances were due to timing slippages on projects rather than underspends.  It was noted that all capital budgets were due to be reviewed again in light of the issues around supply chains and inflation.

In terms of any underspends, it was reported that following carry forwards, and transfers to reserves, there was a balance for consideration of £7.392m.  it was proposed to set aside £5m for local highways needs, and the remaining £2.392m to be allocated to the corporate contingency to enable the council to respond to issues such as increases in inflation, and other cost pressures.

The Chairman of the Overview and Scrutiny Management Board presented the comments from the Board and highlighted that some of the issues raised during consideration of the report included the significant impact of the loss of £24m of government funding over the last two years from the Highways budget, the Green Masterplan project, the considerable financial volatility faced by the Council due to inflation, on-going pay negotiations, and energy costs.  It was also reported that the Board had made some suggestions including the use of ring-fenced funding for civil parking enforcement to be used to recruit additional parking attendants, and that some of the underspend proposed for the contingency budget to be allocated to the Green Masterplan to fund energy saving schemes.

During discussion by the Executive, the following was noted:

·       The Council was entering very challenging times, moving forward in the coming 12 months would be very difficult in terms of setting budgets for future years.  There would be a need for the Council to manage its energy costs, and there would be a need to do things differently in the future.

·       In relation to the civil parking enforcement, it was noted that there were a lot of changes coming including civil parking officers being able to enforce a lot more thins such as yellow boxes/obstructions.  The important factor was to ensure that the enforcement officers were deployed to the right areas.  It was also highlighted that this was a difficult role to recruit to.

RESOLVED

1.    That the carry forwards set out in paragraphs 1.56 to 1.61 and the transfers to reserves set out in paragraphs 1.62 and 1.63 of the report, which are made in line with the Council’s Financial Regulations be noted.

2.    That the proposals in paragraphs 1.65 to 1.67 and Table E, relating to the treatment of the underspend remaining after the carry forwards referred to in paragraph 1 above, be recommended to the County Council for approval.

3.    That the transfers to and from reserves carried out in 2021/22 as set out in Table C of the report, be noted.

4.    That the financial performance in 2021/22 as set out in Table B (Key Financial Performance Measures), Table C (Revenue Budget Final Outturn), Table D (Net Capital Programme Summary Options) and Appendix M (Prudential Indicators), be noted.