Agenda item

To consider the quarter 3 Budget Monitoring report for 2020/21 (attached).

Timing issues with Stronger Council Select Committee had resulted in this Committee reviewing quarter 3. The report set out the 2020/21 General Fund and Housing Revenue Account (HRA) positions, for both revenue and capital, as at 31 December 2020. In terms of General Fund revenue expenditure, a budget over spend of £313,000 was forecast, with projected net expenditure of £18.122 million against an overall budget provision of £17.809 million. The General Fund revenue position was dominated by the impact of the Covid-19 pandemic most notably on:

·      Budget pressures – leisure facilities (£2,318,860) from a combined impact of the management fee loss exacerbated by contract payments to the contractor to maintain the availability of the leisure centres; Qualis income (£2,312,071) owing to a major shift in economic assumptions such as property prices and interest rates that had reduced achievable income streams from the Qualis initiative in the year; and car parking (£1,350,528) from a major decline in Council car park usage in 2020/21 especially during the lockdowns.

·      Government support – £1.947 million in general un-ringed funding had already been provided with further support through an income loss compensation scheme, which was forecast to rise to £2.177 million by the year end (i.e. combined funding of circa £4.1 million).

Income from planning applications had recovered quicker than expected. The HRA position was less affected by the Covid-19 pandemic. On the General Fund Capital Programme, the Council had incurred capital expenditure of £37.34 million (including £30 million in Qualis Investments) at quarter 3, against an overall budget of £53.43 million. On the HRA, the Council had incurred capital expenditure of £8.825 million by quarter 3, against an overall budget of £25.31 million. The Civic Offices accommodation project was the largest General Fund project in 2020/21 with a core budget of £7.242 million (excluding £900,000 for IT costs). At 31 December 2020, over 60% of the allocated budget had been spent, and the new facility should be available for occupation in March 2021.

Councillor S Heap asked about the Chief Executive Support Services costs for full year budget and other activities and he noted that Qualis’ receipts were down but that was understandable in the current Covid crisis. C Hartgrove, Interim Chief Financial Officer, replied that he would provide more information on this after the meeting.

(Post meeting update: On the Chief Executive Support Services budget of £662,550, this budget contained the costs (salaries and other miscellaneous costs) of the Senior Leadership Team, including the Chief Executive and Strategic Directors. It was the gross cost. The costs of S Jevans (Qualis Managing Director on secondment to Qualis) was recharged to Qualis (including a 3% margin).

Councillor J Philip, Finance and Economic Development Portfolio Holder, reported that the impact on reserves was not anywhere near as bleak as it could have been, and this was a timely review of where the Council finances were currently for revenue, capital and the HRA.

Councillor S Murray said that if the Council was to have no increase in the budget for 2021/22, what would be the implications of not having an increase in council tax, i.e. 0%?

Councillor J Philip replied that the Stronger Council Select Committee was trying to minimise the impact on residents and actively looking to see what could be done, but the budget was to be reported to Cabinet on 11 February 2021 and advised waiting until then.

Councillor S Heap queried if some of the underspend could be used for laptops for people who wanted them. Councillor J Philip replied that the Council was looking for grants that would be beneficial for the District but there were not any available yet.

Resolved:

(1)          That the General Fund revenue position at the end of Quarter 3 (31 December 2020) for 2020/21, including actions being or proposed to improve the position, where significant variances had been identified, be noted (Appendix A);

(2)          That the General Fund capital position at the end of Quarter 3 (31 December 2020) for 2020/21, be noted (Appendix B);

(3)          That the Housing Revenue Account revenue position at the end of Quarter 3 (31 December 2020) for 2020/21, including actions being or proposed to improve the position, where significant variances had been identified, be noted; and

(4)          That the Housing Revenue Account capital position at the end of Quarter 3 (31 December 2020) for 2020/21, be noted (Appendix C).