Issue - meetings

Decision:

Noted the Council’s final outturn position and endorsed the decisions taken under delegated authority to transfer the underspend to the Budget Pressures reserve and to make a transfer between the business rates retention reserve and the ICT renewals reserve.

Reason(s):

To note the final outturn position for 2021-22 and to facilitate the ongoing financial management of the Council.

Other options considered and rejected by the Executive:

None.

Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:

None.

The Lead Councillor for Resources introduced the report. Comments arising from the Corporate Governance and Standards Committee meeting held on 29 September were set out in the Supplementary Information Sheet.

It was noted that in the middle of last year the Council identified a significant overspend in the General Fund and the report before the Executive recorded the effects of actions taken to mitigate the situation. The mitigation resulted in a balanced budget and a £138,987 underspend, which had been transferred to the budget pressures reserve.

The net income from interest receipts was £1.5 million more than had been estimated and the minimum revenue provision for debt repayment was £154,414 lower than estimated. Put together, this contributed £1.6 million net additional interest to the General Fund.

The report set out the structure and the use of reserves and it was noted that the reserves available to support the General Fund remained low.

It was noted that the Council was actively encouraging more customers to use online services to free up the telephone lines to residents who did not have access to a computer.

There were no further comments and consequently the Executive,

RESOLVED:

That the Council’s final outturn position on the General Fund for 2021-22 be noted, and that the decisions taken under delegated authority to transfer the underspend to the Budget Pressures reserve and to make a transfer between the business rates retention reserve and the ICT renewals reserve, be endorsed.

Reasons:

To note the final outturn position for 2021-22 and to facilitate the ongoing financial management of the Council.

The Committee received a report setting out the final position on the General Fund and the Collection Fund revenue accounts, for the 2021-22 financial year. 

Overall, the outturn on the General Fund for 2021-22 had been £138,987 less than originally budgeted. This position had been achieved as a result of an in-year action plan put in place to mitigate a projected overspend following period 6 monitoring. The report had set out the major reasons for the variance.  At period 10, officers were predicting an underspend of £229,000, but this had decreased to an underspend of £138,987.

Net income from interest receipts had been £1.5 million more than estimated and the minimum revenue provision (MRP) for debt repayment had been £154,414 lower than estimated, which was £1.6 million net additional interest receipt to the General Fund.

The Chief Finance Officer, in consultation with the Leader of the Council and the Lead Councillor for Resources had used their delegated authority to transfer:

(a)   the underspend to the budget pressures reserve to deal with potential cost pressures in 2022-23; and

(b)   monies that had been earmarked for the implementation of technology as part of Future Guildford from the Business Rates retention reserve to the ICT renewals reserve to enable the further development of Salesforce to continue

Details of the closing balance on all the Council reserves were set out in the report, together with the ongoing policy for each. 

The Committee was advised that there was an overall deficit on the Collection Fund of £488,000, as detailed in the report.

The full unaudited statement of accounts for 2021-22 had been published on Guildford’s website and this included all reserves, collection fund and balance sheet. Once the external auditor had completed their audit, the full set of accounts would be brought to the Committee for consideration and approval, along with the auditor’s findings report. 

During the debate, the Committee made the following comments:      

·       reference to “£000” in the column headings in the table in paragraph 5.2 of the report should be omitted

·       concern that the focus of achieving the goal of 75% of customer contact being online was at the expense of mainly elderly residents who might only be able to contact the council by more traditional means (paragraph 4.16 of the report).

·       Concern over the significant variances between year to date spend for certain services compared to the revised budget figures

·       In response to a query as to unspent specific grant monies awarded by government to the Council to spend on supporting refugee families, the Committee noted that the Council was taking action to support refugees, but the expenditure may have come from other sources of funding.  Furthermore, as the 6-month period that those supporting refugee families had initially signed up for was now coming to an end, there was concern about an increasing number of guests being presented as homeless and the subsequent obligations on the Council to provide support, and this grant funding would be used for that purpose.  ...  view the full minutes text for item 27

Decision:

That the Council’s final revenue outturn position for 2020-21 be noted and that the decisions taken under delegated authority to transfer the amounts set out in Section 5 of the report to or from the relevant reserves be endorsed. 

Reasons:

1)    To note the final outturn position and delegated decisions taken by the Chief Financial Officer which will be included within the statutory accounts.

2)    To facilitate the ongoing financial management of the Council.

Other options considered and rejected by the Executive:

None.

Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:

None.

The Executive considered a report that set out the current situation on the General Fund (GF) Revenue Account, which reflected the Council’s continued efforts to deal with the Covid pandemic. The report set out the major reasons for the variances and requested the Executive to note the report and approve the transfer of relevant reserves.  The Leader introduced the report.

Originally, the costs of Covid had been assessed by the Council as being between £10 and £15 million, whilst the actual overspend had been £6.3 million. However, although lower than anticipated the overspend on the GF Revenue account illustrated the severity of the impact that the Covid pandemic had on the Council’s finances. The underspend on the capital account and extension of Government support packages had provided a buffer, but it was expected that the effects of the pandemic would continue to be observed on the Council’s finances into next year.

The effect on a variety of service areas was noted including a parking income severely impacted by the Covid restrictions with a reduction in income of £2.2 million across on-street and off-street provision. Refuse collection costs had increased as it had become necessary to employ agency staff to cover, alongside an increase in the amounts collected over the period. Heritage, leisure and tourism were highlighted as areas that had seen a significant income loss and consequently supported financially by the Council’s reserves. The gross financial impact for the Council was £18 million compensated to some extent by Government and County Council support arriving at a net impact of £6.3 million. Aside from earmarked funds, there was just £3.5 million remaining in the Council’s reserves that could be used to support future budgets.

There was an overall deficit on the Collection fund of £62.394 million.  This was because the Council had granted a significant amount of rate relief to business rate payers during the year under the various Covid rate relief schemes from government.  The Government had compensated the Council for the loss of income to the collection fund through a Section 31 grant which would be transferred to offset the deficit and would appear in the GF report for 2021-22.

This report had also been considered by the Corporate Governance and Standards Committee at its meeting on 29 July 2021. The Committee commended the report to the Executive and stressed financial prudence going forward.

The Leader once again commended the work of officers across what was described as a turbulent year financially for the Council.  The Executive

RESOLVED: That the Council’s final revenue outturn position for 2020-21 be noted and that the decisions taken under delegated authority to transfer the amounts set out in Section 5 of the report to or from the relevant reserves be endorsed. 

Reasons:

1)    To note the final outturn position and delegated decisions taken by the Chief Financial Officer which will be included within the statutory accounts.

2)    To facilitate the ongoing financial management of the Council.

The Committee received a report setting out the final position on the General Fund and the Collection Fund revenue accounts, for the 2020-21 financial year. 

Overall, the outturn on the General Fund had been £6,498,122 more than originally budgeted, which reflected the Council’s continued efforts to deal with the impact of the Covid pandemic. The report had set out the major reasons for the variance.  Reserves would be utilised to maintain balance in line with the information presented in the outline budget 2021-22 to the Executive at its meeting on 24 November 2020.

Net income from interest receipts had been £1.417 million more than estimated and the minimum revenue provision (MRP) for debt repayment had been £351,107 lower than estimated.

The Chief Finance Officer, in consultation with the Leader of the Council and the Lead Councillor for Resources, would use her delegated authority to deal with the overspend and transfer the necessary resources from reserves.

Details of the closing balance on all the Council reserves were set out in the report, together with the ongoing policy for each.

The Committee noted that the Business Rates balance on the Collection Fund was particularly susceptible to movements in the number and value of appeals that businesses had made against their rateable values.  The Council had no control over these appeals and had limited information from the Valuation Office to help assess the potential impact. 

The Committee was advised that there was an overall deficit on the Collection Fund of £62.394 million, as detailed in the report.

The outturn position would be included in the Statement of Accounts to be signed by the Chief Finance Officer before 31 July 2021, which would be subsequently audited by the Council’s external auditor, Grant Thornton.  The Committee noted that the audited accounts would be reviewed at its meeting in September 2021.

During the debate, the Committee noted the Council had initially estimated the likely deficit caused by the pandemic to be between £10 million and 15 million, which assumed minimal assistance from central government.   However, there were various government schemes through the year that compensated the Council for some losses in revenue and also some grant funding for some of the increased costs.  The Council was now exploring a number of initiatives within the savings strategy to address the ongoing deficit.

Having noted that this matter would be considered by the Executive on 24 August 2021, the Committee

RESOLVED: That, subject to the comments referred to above, the report be commended to the Executive.

Reasons:

·       To note the final outturn position and delegated decisions taken by the Chief Finance Officer, which have been included within the statutory accounts the Chief Finance Officer will sign at the end of July.

·       To facilitate the on-going financial management of the Council.