Agenda item

So the Committee can review the report of the Deputy Leader provided to Cabinet in relation to an overview of the Council’s financial position against the budget as at the end of September 2020 and to present an updated long term forecast.

 

Minutes:

The Committee considered a report, given to Cabinet on the 13th of November 2020 (minute 87 referred), in relation to an overview of the Council’s financial position against the budget as at the end of September 2020 and to present an updated long term forecast.

 

 

The report was split over two distinct sections as follows:

 

1)    The Council’s in-year financial position against the budget at the end of September 2020

 

2)    An updated long term financial forecast

 

In respect of the in-year financial position at the end of September 2020:

 

  • That report was the first detailed financial performance report for 2020/21 but built on the report presented to Cabinet in May, which provided a timely assessment of the impact of COVID 19 on the Council’s financial position.

 

  • Although that report continued to be in the same format as previous regular finance reports, the issues raised in the report back in May were either revisited specifically or formed part of the overall review at the end of the second quarter.

 

  • The position to the end of September 2020, was set out in more detail within the appendices, andshowed that overall the General Fund Revenue Account was underspent against the profiled budget by £6.858m (£4.137m of which related to the timing of expenditure from COVID funding received from the Government). It was acknowledged that other expenditure or income trends may still have emerged with the position also largely having reflected the timing of other general expenditure and/or income budgets. However any significant issues that arose had been highlighted and comments provided as necessary.

 

  • 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 later on in the report, there were 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 was part of updating the long term financial forecast.

 

  • Some necessary changes to the 2020/21 budget had been identified which were set out in Appendix H, with an associated recommendation also included within the report. The same appendix also set out the necessary changes to the budget that reflected the impact of COVID 19, the costs of which had to date been met by the general financial support provided by the Government.

 

  • 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 £41k, which supported the requirement set out in the long term forecast of identifying in-year savings of £500k each year.

 

·         A half year treasury management review had been carried out with a summary set out later in 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 to continue to be a member of the Essex Business Rates Pool if it remained advantageous to do so and if the opportunity was still made available by the Government in 2021/22.

 

·         The recommendations in the Portfolio Holder’s report to Cabinet also responded to the phased reintroduction of membership fees and charges across the various leisure facilities that coincided with the phased reopening up of facilities over the reminder of the year.

 

In respect of the updated long term financial forecast:

 

  • The forecast had been reviewed and updated at the end of September 2020 and reflected an early assessment of the impact of COVID 19. The updated forecast was set out in Appendix I.

 

  • The savings target for 2021/22 had been removed from the forecast with work resuming on that line of the budget as part of the medium / longer term recovery in response to COVID 19.

 

  • Work remained on-going in consultation with the various Services across the Council to identify unavoidable cost pressures, which would be assessed for inclusion or otherwise in the detailed budget report that would be presented to Cabinet in December.

 

·         Overall the revised forecast could still provide an effective method of managing financial risk but the annual deficit or surplus position for each year of the forecast had been amended. However, the medium to long term impact from the COVID 19 crisis remained unclear 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 indicated that the fund could be deleted 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 this 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 2021/22.

 

  • In terms of delivering against the forecast for 2021/22 and beyond, work remained on-going across the various strands set out in Appendix I.

 

After some discussion the Committee RECOMMENDED TO CABINET:

 

1.    That Cabinet record the Committee’s sincere appreciation for the sterling work of the revenues and benefits team and the Section 151 Officer in rapidly developing and deploying grant schemes for businesses to help maintain the economic fabric of the District in these difficult times for those businesses.

 

2.    That consideration be given when reporting on the in year position on the budget to include reference to the comparable position from the previous year.

 

 

 

Supporting documents: