Agenda item

The Committee considered the latest financial monitoring report, which summarised the projected outturn position for the Council’s general fund revenue account, based on actual and accrued data for the period April 2021 to January 2022.

Officers were projecting an underspend on the general fund revenue account of £229,000.  This figure included the final element of the in-year savings plan to redeem the Council’s holding in the M&G Global Dividend Fund as investment income (£1.306 million). However, there was still expected to be shortfalls around expectations of budgeted income.

The direct expenditure incurred by the Council on Covid-19 in the current financial year currently stood at £334,454.   The Council had received a non-specific Covid-19 grant of £622,690 to finance direct Covid-19 costs for 2021-22.  

The indirect costs of Covid-19, particularly the loss of income, were reflected in the services forecasting. The Council had made a claim for some of the income loss for the months of April to June, under the Sales, Fees and Charges (SFC) compensation scheme totalling £1.45 million.  This was currently included within the projection.  Officers were currently projecting a loss of income for the full year of around £4.2 million.  At present the Government did not have any plans to extend the SFC compensation scheme further.

The Council was currently forecasting to have £51.6 million in reserves at the end of the year, of which £10.64 million was usable.

A surplus on the Housing Revenue Account would enable a projected transfer of £8.4 million to the new build reserve and meet the forecasted £2.5 million to the reserve for future capital at year-end. 

Progress against significant capital projects on the approved programme as outlined in section 7 of the report was underway.  The Council expected to spend £59.74 million on its capital schemes by the end of the financial year. 

The Council’s underlying need to borrow to finance the capital programme was expected to be £28.98 million by 31 March 2022, against an estimated position of £94.59 million. The lower underlying need to borrow was a result of slippage on both the approved and provisional capital programme as detailed in paragraphs 7.3 to 7.6 of the report. 

The Council held £212 million of investments and £332 million of external borrowing on 31 January, which included £193 million of HRA loans.  Officers confirmed that the Council had complied with its Prudential indicators in the period, which had been set in February 2021 as part of the Council’s Capital and Investment Strategy.

In considering this report, the Committee made the following comments: 

·       In response to an enquiry, in the context of outstanding sundry debts, as to whether the Council had contingencies in place to assist those in financial hardship, including support from the Government, the Director of Resources confirmed that the Local Council Tax Support Scheme would help people who were struggling to pay their council tax if they met certain criteria, and there was also a discretionary hardship fund as a fall-back.  It was also noted that the Council’shousing rents team were actively engaging with tenants and helping them with debt management in order to make sure that they keep up with their rent payments. Monies from the Government’s Hardship Fund were paid to the County Council, who in turn channelled the funding to the districts and boroughs.  This Council’s allocation was passed to the Project Aspire team who had been administering a grant scheme. Details of the funding for the Ukrainian refugee scheme were emerging and it was understood that councils would receive £10,500 per household, although this would again be an allocation initially to county councils.

·       In relation to the provision of a breakdown of the debt outstanding for a period of over three months (totalling £5.47 million), the Director of Resources confirmed that this information would be circulated to the Committee, together with a breakdown of the Crematorium and financial services debts.  In response to a question as to the recoverability of those debts, the Director was confident of recovering a relatively high percentage of them.

·       In response to a request for information as to arrears of Council Tax, the Director of Resources confirmed that details would be circulated to the Committee.

·       In relation to the underspends of grant income in the table of variances at service level items, it was noted that these would be transferred to reserves at the year-end and then spent in the following year and shown as a carry forward in the revised budget for the next financial year.

·       In response to ongoing concern over the significant variance between expected expenditure on the capital programme (£46.56 million) compared to the revised estimate of £88.18 million, the Director of Resources confirmed that in relation to strategic property acquisitions, the Council had repurposed that budget to focus investment in the redevelopment of the Council’s industrial estates rather than the purchase of property.  The Council was monitoring progress with major capital projects through the Major Projects Programme Board.  The project and programme governance arrangements introduced over the past two years also meant that there was now more oversight, transparency and rigour in monitoring progress of major capital projects.  It was felt that the original profiling of budgets for certain capital schemes might have been overambitious.  The Director reported that the Executive would be re-evaluating the value for money in respect of a number of schemes in due course. 

Having considered the report, the Committee

RESOLVED: That the results of the Council’s financial monitoring for the period April 2021 to January 2022 be noted, subject to the comments referred to above and the following further actions:

Reason:

To allow the Committee to undertake its role in relation to scrutinising the Council’s finances.