Agenda item

To provide an overview of the Council’s financial position against the budget as at the end of September 2021 and to present an updated long term forecast.

RESOLVED –

1.      That, in respect of the financial performance against the budget at the end of September 2021:-

(a)    the current position be noted;

(b)    the proposed in-year adjustments to the budget, as set out in Appendix H to item A.8 of the Report of the Portfolio Holder for Corporate Finance & Governance, be approved;

(c)    in respect of the Council’s Treasury Management Practices, the aggregate amount of money that can be placed overnight with the Council’s bankers be increased temporarily from £1.000m to £1.500m for each day the offices are closed over the Christmas 2021 break;

(d)    the Council continues to be a member of the Essex Business Rates Pool in 2022/23 if it remains financially advantageous to do so; and

(e)    the closing date for Members to submit claims under the Members’ COVID-19 small grant scheme be set as 31 March 2022.

2.      That, in respect of the Updated Long Term Forecast:-

the updated forecast be approved and that the Resources and Service Overview and Scrutiny Committee be consulted on the latest position.

The Cabinet gave consideration to a report of the Corporate Finance & Governance Portfolio Holder (A.8) which provided it with an overview of the Council’s financial position against the budget as at the end of September 2021 and also with an updated long term forecast.

In respect of the in-year financial position at the end of September 2021:

Cabinet was informed that the position to the end of September 2021, as set out in more detail within the appendices to the Portfolio Holder’s report, showed that overall the General Fund Revenue Account was underspent against the profiled budget by £8.483m (after excluding variances against COVID 19 grant supported activities, such as business grants, this position was revised to a net overspend of £4.372m). It was acknowledged that other expenditure or income trends might still be emerging with the position also largely reflecting the timing of other general expenditure and/or income budgets. However, any significant issues arising to date had been highlighted and comments provided as necessary within the Portfolio Holder’s report.

In respect of other areas of the budget such as the Housing Revenue Account, capital programme, collection performance and treasury activity, apart from additional details set out within the report, there were other no major issues that had been identified to date. Any emerging issues would be monitored and updates provided in future reports, which would include their consideration as part of updating the long term financial forecast.

It was reported that some necessary changes to the 2021/22 budget had been identified which were set out in Appendix H, with an associated recommendation also included within the report. That same appendix also set out a number of further changes to the budget that reflected the on-going impact of COVID 19, the costs of which would be met by using the general financial support provided by the Government.

Members were advised that the net impact of the budget adjustments would be moved to, or from, the Forecast Risk Fund. At the end of the second quarter, it had been possible to make a small contribution to the fund of £40,000, which supported the requirement set out in the long term forecast of identifying in-year savings of £500,000 each year.

Cabinet was made aware that a half-year treasury management review had been carried out with a summary set out within the report along with an associated recommendation to temporarily increase the aggregate limit of funds that could be placed overnight with the Council’s bankers for the period that the offices would be closed over the Christmas break.

It was proposed that this Council continue to be a member of the Essex Business Rates Pool if it remained advantageous to do so in 2022/23.

It was also proposed to bring the Member’s COVID-19 small grant scheme to a close by 31 March 2022.

In respect of the updated long term financial forecast:

It was reported that the forecast had been reviewed and updated at the end of September 2021 and that it continued to reflect the ongoing impact of COVID-19 as necessary. The updated forecast was set out in Appendix I.

Members were informed that work remained on-going in consultation with the various Services across the Council in order to identify savings within a zero based approach along with unavoidable cost pressures, that remained subject to review for inclusion or otherwise in the detailed budget report that would be presented to Cabinet in December 2021.

Cabinet was advised that, overall, the long term forecast could still provide an effective method of managing financial risks but that the annual deficit or surplus position for each year of the forecast had been revised. The on-going impact from the COVID-19 pandemic was still evolving and it was therefore important to highlight that the money set aside in the Forecast Risk fund should not be seen as overly cautious as sensitivity testing had indicated that the fund could be depleted within as little as 3 years if a number of factors arose during the same period.

A detailed review of risks associated with the long term forecast was subject to on-going review and was separately reported within Appendix J.

As mentioned during the development of the longer term approach to the budget over recent years, it was important to continue to deliver against the plan as it continued to provide a credible alternative to the more traditional short term approach, which would require significant savings to be identified in 2022/23.

In terms of delivering against the forecast for 2022/23 and beyond, work remained on-going across the various strands set out in Appendix I.

Having considered the detailed information and advice contained in the Portfolio Holder’s report and its appendices:-

It was moved by Councillor G V Guglielmi, seconded by Councillor McWilliams and:-

RESOLVED –

1.      That, in respect of the financial performance against the budget at the end of September 2021:-

(a)    the current position be noted;

(b)    the proposed in-year adjustments to the budget, as set out in Appendix H to item A.8 of the Report of the Portfolio Holder for Corporate Finance & Governance, be approved;

(c)    in respect of the Council’s Treasury Management Practices, the aggregate amount of money that can be placed overnight with the Council’s bankers be increased temporarily from £1.000m to £1.500m for each day the offices are closed over the Christmas 2021 break;

(d)    the Council continues to be a member of the Essex Business Rates Pool in 2022/23 if it remains financially advantageous to do so; and

(e)    the closing date for Members to submit claims under the Members’ COVID-19 small grant scheme be set as 31 March 2022.

2.      That, in respect of the Updated Long Term Forecast:-

the updated forecast be approved and that the Resources and Service Overview and Scrutiny Committee be consulted on the latest position.