Agenda item

RESOLVED that –

1)    the monitoring position of the General Fund at the end of the second quarter as detailed in Appendix 1 (a net favourable variance of £0.275m against the profiled budget) and the key issues highlighted with this report, be noted.

2)    The position on the Housing Revenue Account (HRA), the Capital Programme and Treasury Management at the end of the second quarter (as detailed in Appendices 3, 4 and 5), be noted.

Executive considered the report of the Portfolio Holder – Finance which provided an update on the financial position of the Council following the 2021/22 second quarter’s budget monitoring exercise for the General Fund, the Housing Revenue Account (HRA), Capital Programme and Treasury Management activity.

General Fund

The original budget for 2021/22 showed a funding deficit of £0.291m.  The current budget showed this had reduced to £0.067m deficit after the Council tax increase and other small movements were included.

A breakdown of the quarter 2 monitoring position by Directorate was included in the report.  The overall position of the General Fund at the end of quarter 2 showed that there was a favourable variance of £0.275m.  This was mainly due to receiving income in advance of spend for the year.  The budget pressures that continued to be caused by the pandemic such as leisure income, would in part be covered by government funding.  Although the budget for planning income had been reduced in the MTFP in light of the pandemic the Council had actually received £0.059m, more than half of the anticipated budget by the end of quarter 2.

Housing Revenue Account

The quarter 2 income figures showed an adverse variance of £0.163m.  The loss in dwelling rents due to voids was £0.156m of this.  Expenditure showed an overall favourable variance of £0.243m.  Overall, the only significant issue at the end of the second quarter was the reduction in income caused by voids being at a level higher than budgeted for.

Capital Programme

In headline terms, the Capital Programme profiled budget for quarter 2 was £13.330m and the actual spend and known commitments totalled £7.831m, which was £5.499m behind the planned spend position.

There were no significant financial issues to report regarding capital expenditure, however it was noted that the delivery of the approved capital programme was behind the profiled position as at quarter 2.

Treasury Management

The treasury management activity undertaken in the second quarter of 2021/22 was in line with the plans agreed as part of the Treasury Management Strategy.  The income received from investments was higher than budgeted, however, interest rates being received on investments was generally lower than estimated.  A full assessment of investments and cash balances would be carried out in preparation of revised budgets.

Moved by Councillor Clive Moesby and seconded by Councillor Duncan McGregor

RESOLVED that –

1)    the monitoring position of the General Fund at the end of the second quarter as detailed in Appendix 1 (a net favourable variance of £0.275m against the profiled budget) and the key issues highlighted with this report, be noted.

2)    The position on the Housing Revenue Account (HRA), the Capital Programme and Treasury Management at the end of the second quarter (as detailed in Appendices 3, 4 and 5), be noted.

(Assistant Director of Finance and Resources)

REASON FOR DECISION:

The report summarised the financial position of the Council following the second quarter’s budget monitoring exercise for the General Fund, the Housing Revenue Account, Capital Programme and Treasury Management activity.

OTHER OPTIONS CONSIDERED:

The budget monitoring report for 2021/22 was primarily a factual report which detailed progress against previously approved budgets.  Accordingly, there were no alternative options to consider.