Agenda item

Budget Monitoring Report - Quarter 1 - April to June 2021


(iii)       Budget Monitoring Report – Quarter 1 – April to June 2021


Committee considered a report which provided information in relation to the financial position of the Council following the first quarter’s budget monitoring exercise (2021/22) for the General Fund, the Housing Revenue Account (HRA), Capital Programme and Treasury Management activity.


The Head of Finance and Resources took Members through the report providing detailed explanation.


General Fund Revenue Account


The General Fund Revenue Account summary was shown in Appendix 1 to the report.  The original budget for 2021/22 showed a funding deficit of £0.291m.  The current budget showed that this had reduced to £0.180m deficit after the Council tax increase and other small movements were included.  As savings were identified and secured they were moved into the relevant cost centres within the main General Fund Directorates. 


The budget pressures that continued to be caused by the pandemic, such as leisure income, would be in part covered by government funding.  Although the budget for planning income in the MTFP was reduced in light of the pandemic, it was pleasing to see that the Council had actually received £0.035m more than a quarter of the anticipated budget by the end of quarter 1.


It should also be remembered that for all years from 2021/22 there was a transfer into the General Fund from the NNDR Growth Protection Reserve to replace the losses caused by changes in Government funding. 


Officers would begin working with budget managers during the next quarter to compile a revised budget for 2021/22, which would amend the current budgets to capture additional budget savings and losses and reduce spending where it was anticipated that there would be minimal impact upon service delivery.  The revised budget position would be presented to Members in November and December 2021.


A Member queried if any consideration had been given by the Council to move to an electric vehicle fleet for its smaller commercial vehicles.  The Portfolio Holder – Finance suggested that this could be looked at by the Climate Change and Communities Scrutiny Committee as a review.


A short discussion took place and it was agreed that the Climate Change and Communities Scrutiny Committee be asked to consider carrying out a review of the current procurement arrangements for new motor vehicles for the Authority, in particular bearing in mind climate change and alternate fuels to petrol and diesel (electric), when their work programme permits.


Housing Revenue Account (HRA)


The Housing Revenue Account summary for the 1st quarter of 2021/22 was set out in Appendix 3 to the report.  At the end of quarter 1 the HRA was showing a net deficit of £0.175m.


The quarter 1 income figures showed an adverse variance of £0.535m.  This was mainly due to the timing of the rent free week falling into the 1st quarter.  The annual budget was profiled to receive 12 weeks in the 1st quarter when actually only 11 weeks were billed.  An estimate of the weekly rent debit was £0.434m giving a variance of £0.080m due to 1.17% more voids than estimated in quarter 1. 


The large adverse variance on Housing Related Support – Wardens, was due to the quarter 1 invoice to DCC for the Provision of Independent Living Service not yet being raised - £0.070m.


In summary, and in light of the above and the expenditure patterns to date, the only significant issue regarding the overall position for the HRA at the end of the 1st quarter was the reduction in income caused by voids being at a level higher than budgeted for.

The additional void rent loss was as a result of the on-going ambitions of the Council with the delivery of a wide range of capital schemes, the nature of these schemes often required the decanting of tenants.  Once schemes were complete it was then the aim to let all the properties within the scheme.


Capital Programme


The capital programme summary for the first quarter of 2021/22 was provided in Appendix 4 to the report.


In headline terms, the capital programme profiled budget for quarter 1 was £6.617m and the actual spend and known commitments totalled £3.938m, which was £2.679m behind the planned spend position. 

Whilst there were no significant financial issues to report regarding capital expenditure at the end of the 1st quarter, it must be noted that the delivery of the approved capital programme was behind the profiled position as at quarter 1. 


Capital Resources


HRA – The Council had sufficient capital resources in place to finance the HRA actual expenditure and commitments at the end of the 1st quarter.


General Fund – The financing of the General Fund part of the capital programme was in line with the approved financing arrangements.


Treasury Management


The treasury management function covered borrowing and investment of Council money.  This included both the management of the Council’s day to day cash balances and the management of its long term debt.  All transactions were conducted in accordance with the Council’s approved strategy and the CIPFA Code of Practice.  Good treasury management played an important role in the sound financial management of the Council’s resources.


There were no issues to report in relation to Treasury Management.Investment interest was slightly better than predicted (£2k).


Moved by Councillor Tom Munro and seconded by Councillor Chris Kane

RESOLVED that (1) the monitoring position of the General Fund at the end of the first quarter, as detailed on Appendix 1 (a net favourable variance of £0.124m against the profiled budget), and the key issues highlighted within the report be noted,


(2) the position on the Housing Revenue Account (HRA), the Capital Programme and Treasury Management at the end of the first quarter as set out in Appendices 3, 4 and 5 of the report be noted,


(3) the Climate Change and Communities Scrutiny Committee be asked to carry  out a review of the current procurement arrangements for new motor vehicles for the Authority, in particular bearing in mind climate change and alternate fuels to petrol and diesel (electric).

(Scrutiny & Elections Officer)


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