Agenda item

(i)         Budget Monitoring Report – Financial Outturn 2020/21

Committee considered a report of the Head of Finance & Resources which provided an update of the Council’s financial outturn position for the 2020/21 financial year.

The Council had published its draft Statement of Accounts 2020/21 on 14thJune 2021.  The statutory deadline of 31^st May 2021 had been extended to 31st August 2021 to take into consideration the impact of the Coronavirus pandemic.  The draft Statement of Accounts would be subject to independent audit from Mazars, the Council’s external auditors, with the statutory date for the final audited accounts being 30th November 2021 (extended from 31st July). 

The report set out the 2020/21 outturn position in respect of the General Fund, Housing Revenue Account (HRA), Capital Programme and Treasury Management activities.  Consideration was given to the level of balances at the year end and the impact which the closing position had upon the Council’s budgets in respect of the current financial year 2021/22.

General Fund

The position in respect of the General Fund outturn was detailed in Appendix 1to the report and showed the current budget compared to the final outturn position.  The main variances against the current budget were shown in Table 1 with variances at service level shown in Appendix 2.

The General Fund Balances were considered to be at an acceptable level for a District Council rather than at a generous level.  The General Fund balance needed to be considered against a background of ongoing changes to the level of Government funding together with a range of risks facing the Council.  With only a limited level of General Fund reserves it was crucial that the Council continued to maintain robust budgetary control whilst securing its ongoing savings targets in order to safeguard both its reserves and its financial sustainability.

Covid-19 Pandemic

A further table in the report showed the main sources of financial support that the Council received from the Government to support businesses, individuals and the Council’s own additional cost pressures and losses in income due to the pandemic.

Housing Revenue Account

The Housing Revenue Account was provided in Appendix 3 to the report.

The level of HRA Balances had decreased to £2.116m in line with the current budget.  The HRA balances were considered appropriate with the level of financial risk facing the HRA.  Maintenance of this balance was necessary as it would help ensure the financial and operational stability of the HRA which was essential if the Council was to maintain the level of services and quality of housing provided to its tenants over the life of the 30 year Business Plan.

Capital Investment Programme

Details of capital expenditure incurred by the Council in 2020/21 on a scheme by scheme basis was provided in Appendix 4 to the report.

Appendix 4 also detailed the proposed carry forward amounts to 2021/22.  These requests related to individual schemes that were still in progress, where there were outstanding commitments or where the scheme had been delayed.  The carry forward amount was £5.447m with the impact on the 2021/22 capital programme detailed in the Appendix.  The report noted that all the expenditure requirements would take forward a corresponding level of financial resources and thus have a neutral impact on the financial position in 2021/22

Treasury Management

Appendix 5 to the reportprovided a brief on the Council’s Treasury Management activity for 2020/21. 

In summary, the Council operated throughout 2020/21 within the Authorised and Operational Boundary limits approved in the Treasury Management Strategy as approved by Council in February 2020.

Key points from the summary report were:

·       The overall borrowing requirement of the Council (the Capital Financing Requirement) - £116.581m at 31 March 2021.

·       The Public Works Loan Board (PWLB) debt - £97.100m.

·       Effective internal borrowing - £19.481m.

·       £2m repayments of PWLB debt in year.

·       No new PWLB borrowing was undertaken in 2020/21.

·       PWLB interest paid in 2020/21 - £3.474m.

·       Interest received on investments - £0.167m

Committee was asked to note that while the Council had effectively addressed its Strategic Financial Risks during 2020/21, it would need to give careful consideration to both capital and revenue income opportunities before they were rejected, looking to the directorate for development to generate income to ensure the Council’s financial future was sustainable over the long term.

A Member referred to paragraph 2.14 of the report and raised his concern regarding the increase in void Council properties and a reduction in dwelling rents income.  The Portfolio Holder - Finance advised Members that due to the pandemic, rent arrears had increased and this had created a shift in getting voids back on to the market due to staff spending time recovering rents.  However, the situation with voids was being monitored. 

The Scrutiny & Elections Officer reminded Members that the former Customer Services & Transformation Scrutiny Committee (now Customer Services Scrutiny Committee) had carried out a review in relation to voids in 2019/20, which had continued into last year due to the pandemic and the monitoring of voids was ongoing by the Committee.

The Head of Finance also added that due to the current number of capital schemes, tenants were being decanted and these properties left void until the capital schemes were finished.

Moved by Councillor Chris Kane and seconded by Councillor Graham Parkin

RESOLVED that (1) the outturn position in respect of the 2020/21 financial year be noted,

(2) the transfers to various earmarked reserves of £0.906m as outlined in detail in paragraph 2.3 of the report be noted,

(3) the proposed carry forward of capital budgets as detailed in Appendix 4 of the report totalling £5.447m be noted.