Agenda item

The Quarter 1 Budget Monitoring Report as presented to Cabinet at its meeting on 28 July is attached for the Committee to consider.

Contributors:

Martin Tett, Leader

Katrina Wood, Deputy Leader and Cabinet Member for Resources

Richard Ambrose, Service Director for Corporate Finance (Section 151 Officer)

Paper:

Q1 Budget Monitoring Report

Ms K Wood, Deputy Leader and Cabinet Member for Resources presented the Q1 Budget Monitoring Report which was presented to Cabinet at its meeting on 28 July. Ms Wood summarised the report which reflected the business as usual and covid pressures faced during that period.

The forecast revenue outturn was an overspend of £5.97m. Many pressures were covid related with not all costs being recovered and not all lost income being offset by Government. ‘Business as usual’ pressures were noted in adult services within learning disability budgets, childrens services within home to school transport budgets and in staffing budgets within the Planning, Growth and Sustainability directorate. A quarter 2 update report would be presented to Cabinet at the end of October and the Committee was advised that figures were not expected to be significantly different with many income streams still yet to have been stood up by the end of Q2. The committee was advised that it was difficult to predict additional lost income and further Government support at the present time with covid cases on the rise again locally, and nationally. Further, it was noted that there may be slippage on capital increases due to the impact of covid.

The following key points were raised by the Select Committee members during discussion:

• In relation to Government support, the committee was advised that the council had been lobbying where it could and awaited the rules and regulations to be shared around lost income. Local Members of Parliament were aware of the council’s concerns, particularly around the reimbursement of fees and charges and concerns around the collection of council tax and business rates, all of which lead to difficulties with forecasting for the next financial year. The Council had received information from Government on the income protection scheme, however this scheme applied only to the current financial year and there was a lack of clarity on support to local authorities in the next year.
• Leisure centres were recognised as a significant strain on this year’s budget, and potentially could be an issue in the next year, dependant on the local and national situation. Central Government was being lobbied on this issue which was a significant concern for many local authorities, with leisure centres being outsourced and the Council receiving an income from leisure operators. 
• Clarity was provided on the difference between the transformation delivery programme and transition funding in such that a transition budget was created in the lead up to becoming a unitary authority and at the beginning of the year this had an underspend which was moved to the transformation programme which the Shadow Authority had previously approved to focus on bringing teams and systems together to deliver further savings. The balance of the transition fund had been added to the 14m transformation pot to total 16.7m. Covid had delayed some of the transformation work although service reviews had commenced and remained closely monitored.
• Concern was raised that since the return to school in September, home to school transport could be further overspent than noted in the Q1 update. The Committee was advised that covid had significantly affected this income stream and support had to be given to providers. Further pressures were expected in this area within the next monitoring report.
• Childrens services remained a substantial concern due to the sensitivity and importance of the service and its demand driven nature where individual cases can have significant associated costs. As a result of the lockdown period and increased family tensions, severe financial pressure were anticipated.
• In comparison to other local authorities, the Committee was advised that in relation to national emergency funding it had received from Government, the Council was not in as difficult a position as many other local authorities found themselves and were not at any present risk of having to publish a section 114 notice. It was confirmed that there was still a large funding gap and Government lobbying would continue to ensure covid related costs were fully recovered.

The timing of the report was discussed and the Committee was advised that the calendar of meetings had not tied in well with the monitoring report this meeting cycle, however the November meeting would be more timely for the Q2 report to be discussed.