Agenda item

Decision:

(1)    That the results of the Council’s financial monitoring for the period April 2021 to September 2021, be noted.

(2)    That the actions set out in paragraph 4.3 of the report submitted to the Executive to achieve in-year savings to help reduce the overspend and mitigate the impact on reserves, be approved.

(3)    That the implementation of a “voluntary expenditure freeze” across services, be approved.

Reason:

To enable the Executive to respond to the scrutiny of the Council’s finances.

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 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 September 2021.

The report had been reviewed by the Corporate Governance and Standards Committee on 18 November 2021 and the comments arising were set out on the Supplementary Information Sheet.

In the absence of the Lead Councillor for Resources, the Leader of the Council introduced the report.

The meeting heard that the Covid pandemic continued to have a negative effect on the Council’s finances and that steps would need to be taken to mitigate those effects and maintain a sound financial position. The general fund summary was set out in Appendix 1 of the report predicting a gross overspend of £2.6m. There was a positive effect coming from a reduction in minimum revenue provision, lower interest rates on the loans portfolio and receipts from North Downs Housing resulting in a net projected overspend of £1.76m. The main cause of the overspend was the reduction in car parking revenues estimated to be in the region of £3.7m which had been offset to some extent by Government’s fees and charges reclaim scheme. However, the scheme had closed in June 2021 and there was no indication it would be resumed. There was a reduction in the value of the leisure management contract of £800,000. The direct Covid expenditure of £300,000 had been offset by Government for the full year. Finally, there was a £500,000 overspend in Planning which was partially due to staff expenditure to clear a backlog and also to provide cover for senior staff illness. On a positive note, the pre-application service would now be able to resume in the New Year and return services to normal functioning levels.

The report had set out ways in which the Council could prevent further impacts on reserves. There would be a capital return fund investment of £1.5m and the original investment would be reinvested in a suitable way. This would be a one-off opportunity to mitigate budget shortfall whilst the mid-term position remained the same with an additional £1.5m required to balance the budget for 2022-23.

The Leader reflected that with the fast-changing Covid scenario the Council should remain prudent and advised the Executive to agree the recommendations set out in the report. The Executive, consequently,

RESOLVED:

(1)    That the results of the Council’s financial monitoring for the period April 2021 to September 2021, be noted.

(2)    That the actions set out in paragraph 4.3 of the report submitted to the Executive to achieve in-year savings to help reduce the overspend and mitigate the impact on reserves, be approved.

(3)    That the implementation of a “voluntary expenditure freeze” across services, be approved.

Reason:

To enable the Executive to respond to the scrutiny of the Council’s finances.