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 2020 to January 2021.

Officers were projecting an increase in net expenditure on the general fund revenue account of £13,828,046.

Covid-19 continued to impact the Council.  The direct expenditure incurred by the Council in the current financial year currently stood at £3,208,895.  The Government support would contribute to both the direct and indirect costs of the Covid-19 pandemic.

The indirect costs of Covid-19 were 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 were subject to change as the year progressed. The report considered the expenditure and income forecasted up to 31 January 2021 and would therefore potentially move adversely as the measures progressed.

The Committee was reminded that the Council, at its meeting of 5 May 2020 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 further detail had been received.

The increase in net expenditure on services, net of reserve transfers, was £13,828,046.

There was 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 had been 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 £7.61 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 £822,692 lower than budgeted assumption due to slight fall in income forecast despite the fall in expenditure.

Progress against significant capital projects on the approved programme as outlined in section 7 of the report was underway.  The Council expected to spend £41.934 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 £21.241 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 £130 million of investments and £271 million of external borrowing on 31 January 2021, 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 in February 2020 as part of the Council’s Capital Strategy.

During the debate, the Committee expressed concern over possible loss of external grant funding in the event of slippage on capital schemes.  The Director of Strategic Services was requested to provide a report on how capital schemes were being managed to ensure grant funding was not lost, including the respective timelines for possible repayment of grant.

In response to a question as to whether the Council borrows money that it does not spend at the year-end, officers confirmed that the Council’s approach was to only borrow externally when there was an actual need to do so. 

The Committee, having noted the various corrections and clarifications on the Supplementary Information Sheet,

RESOLVED: That the results of the Council’s financial monitoring for the period April 2020 to January 2021 be noted. 

Reason:

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