Agenda item

The Revenue and Capital Outturn Report for the financial year 2021-22 as presented to Cabinet at its meeting on Tuesday 7 June is attached for the Committee to consider.

Contributors:

Councillor John Chilver, Cabinet Member for Accessible Housing and Resources

Sarah-Murphy-Brookman, Corporate Director – Resources

Matthew Strevens, Head of Finance – Corporate

Mark Preston, Head of Projects & Pensions

Papers:

Budget Monitoring Outturn 2021-22

The Chairman invited the Cabinet Member for Finance, Resources, Property and Assets, Councillor J Chilver, to introduce the report. In the Cabinet Member’s presentation, the following points were highlighted:

·       The report set out the final financial outturn position for the financial year 2021-2022. It showed a more favourable position compared to the forecast position in the previous quarter on revenue overall. There was a £2.2m favourable variance, which was up from the £0.9 million forecast in quarter three.£7.7m of unrequired contingencies were built into the original budget due to the uncertainties and risks, particularly linked to COVID. It had been recommended that both these variances and the unused contingencies (total of £9.9m) be transferred to a specific reserve. This was to mitigate the growing financial risks in the current year and beyond linked to increased inflationary pressures, global turbulence, local government finance reform, and the new adult social care reforms. This affected both the Council’s direct costs and the costs of providers.

·       Construction inflation at 20% was particularly impacting on the Council’s future capital programme table.

·       Main overspends were seen in the education and children's services, transport, and health and wellbeing portfolios. The climate change and environment portfolio had seen an underspend, mainly delivered by increased revenue from the energy from waste plant.

·       There was forecast net slippage of £18.7m, which was an improvement on the quarter three position of £22.5m. This represented 9.5% of the overall capital budget, which is within the council's target of 10%. The slippage is mainly a result of COVID implications, including the availability of building materials and components. It had been recommended that slippage is carried into future years on already improved capital schemes.

·       Work had been undertaken to ensure the capital program was as realistic as possible. However, current inflationary pressures meant that a review needed to be undertaken. A task and finish group had been set up to review the capital budget to identify potential savings.

·       The Council achieved £12.8m of savings, which was below the target of £13.2m. Overall debt levels had been reduced over recent months. Unsecured debt over 90 days was at £8.5m, decreased from £10m in quarter three. Debt recovery had been affected by COVID, with suspensions of court activity. However, a recent focus on outstanding debt had significantly helped the overall position.

·       The overall performance for the last quarter on prompt payments to suppliers was 95%.

The following points were noted during the Committee’s discussion:

·       Comparing the council’s 10% slippage target to other local authorities was difficult due to some authorities adjusting their budget throughout the year. However, in comparison to published results from other authorities, Buckinghamshire Council’s slippage levels were good.

·       Prompt payment to suppliers was measured against two targets. For local, smaller, and medium-sized enterprises, the target timeframe for payment was 10 days. The general terms for payment were 30 days. As these timeframes were measured from the date on the invoice, delays in payment could occur as a result of processing time to reach the Council, for example over weekends. The performance of 95% was satisfactory, and comparable to other authorities.

·       A Member asked whether the Committee could be provided with a breakdown of savings from quarter four detailing recurring and one-off savings. The Cabinet Member advised that identifying ongoing savings from the previous year was part of the budget-setting process. As the budget was based on the forecast for quarter four, savings that were known at the time were marked as such. Ongoing savings identified throughout the year would be fed into future budgets.

·       A Member noted that a significant amount of money from the energy from waste plant was allocated to a reserve pot. The Cabinet Member explained that these funds were established to mitigate against future risks on this income (for instance the plant closing for maintenance). The Cabinet Member added that consideration to the allocation of these funds would be discussed in next year’s budget proposal.

·       A Member asked if the next budget should include funds to help residents during the energy crisis. The Cabinet Member explained that the budget for the current year had been agreed and that scenario planning was done to account for factors such as inflation, resulting in a £10m special and £50mgeneral reserve to mitigate the impact.

·       The Cabinet Member agreed that the quality of reporting needed some improvements. It was suggested that a summary line for expenditure and income be added across the energy and climate change portfolio to increase understanding for expenditure more broadly.

·       Concern was raised about the impact of inflation in construction costs and its impact on major projects. The Cabinet Member was aware of budgetary pressures on projects and advised that they were examined regularly on a case-by-case basis considering the latest forecast and developing action plans. Additionally, a task and finish group to review the capital programme had also been set up.

·       The task and finish group would also be considering the uncommitted £3.3m of slippage on Section 106 funded projects for affordable housing. The Cabinet Member explained that this was legacy funding and highlighted the Council’s commitment to delivering the affordable housing programme with some projects already in the pipeline.

The Chairman thanked the Cabinet Member for the report.