Agenda item

The Committee considered a 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 to November 2020.

Officers were projecting an increase in net expenditure on the general fund revenue account of £8,167,251. 

Covid-19 continued to impact the Council in several ways including the inability to maintain income levels at those budgeted for in February 2020.  The direct expenditure incurred by the Council in the current financial year stood at £2,914,217, with support received from the Government of £2,197,153.  The Government support would contribute to both the direct and indirect costs of the Covid-19 pandemic.

The indirect costs of Covid-19 are reflected in the services forecasting.  As the pandemic continued, estimates for losses in income and increased costs had been made with the best information available, which would be subject to change as the year progressed. The report considered the expenditure and income forecasted up to 30 November and would therefore potentially move adversely as the measures progressed.

The Committee was reminded that the Council, at its meeting of 5 May 2020, had approved an emergency budget to deal with the impact of Covid-19 should government support fall short of the final costs of the pandemic.  The Government had since announced further support for local authorities and figures would be updated to reflect this support once the detail had been received.

The increase in net expenditure on services, net of reserve transfers, had been £7,986,808.

There had been a reduction (£351,107) in the statutory Minimum Revenue Provision (MRP) charge to the general fund to make provision for the repayment of past capital debt reflecting a re-profiling of capital schemes. This was offset by a reduction in interest income of £531,550 leaving a net movement on Interest and MRP of £180,443.

A surplus on the Housing Revenue Account would enable a projected transfer of £8.53 million to the new build reserve and £2.5 million to the reserve for future capital at year-end.  The transfer was projected to be £97,384 higher than the budgeted assumption and reflected modest variations in repair and maintenance expenditure and staffing costs.

Progress against significant capital projects on the approved programme, as outlined in section 7 of the report, was being made.  The Council expected to spend £49.596 million on its capital schemes by the end of the financial year.  The expenditure was higher than it had been for many years and demonstrated progress in delivering the Council’s capital programme.

The Council’s underlying need to borrow to finance the capital programme was expected to be £28.561 million by 31 March 2021, against an estimated position of £125.956 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 £143 million of investments and £276 million of external borrowing as at 30 September 2020, which included £192.5 million of HRA loans.  Officers confirmed that the Council had complied with its Prudential indicators in the period, which had been set in February 2020 as part of the Council’s Capital Strategy.

Following clarification of a number of queries, the Committee:

RESOLVED: That the results of the Council’s financial monitoring for the period April to November 2020, be noted.

Reason:

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