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.