To consider Item 5
The Principal Accountant advised Members that the report set out the Authority’s revenue and capital spending position as at 30 September 2020, together with the projected outturn position for the financial year. The current expenditure forecast of £31.901m, against a budget of £31.339m, resulted in an overspend of £562k. However, due to the additional funding of £836k received in year in relation to Covid and protection grants, the net overall underspend was £274k.
The Principal Accountant gave Members a summary of variances seen within each directorate:
· Corporate core was showing a £3k underspend which related to underspend in legal costs and consultations with the public, as well as courses and conference fees postponed due to Covid, offset by unachievable interest income on investments and additional audit fees not budgeted for;
· Finance and Assets was showing an overspend of £97k which predominantly related to West Ashland revenue costs which would be expected to be partially covered by charges to SCAS and TVP not currently reflected in the forecast. This was offset by underspend relating to vacant posts within the directorate that had now been filled or recruitment delayed due to Covid;
· Most of the underspend shown within People & Organisational Development was due to underspend seen within employee costs. In addition, the Authority was not expecting £13k Thames Valley collaboration costs during the current financial year;
· Delivery, Corporate Development & Planning was currently projecting a £30k overspend. This was predominantly due to Covid response costs of £476k which were reported within this directorate. In addition, £230k had been transferred to a Covid-19 reserve as approved by the Executive Committee in September. This was offset by underspend seen within wholetime and on-call direct employee costs. This was due to a number of wholetime posts not being at the top of pay scales and employees being in the 2015 pension schemes which would see a lower contribution rate than budgeted for in the 1992 scheme.
· Statutory accounting and contingency overspend of £500k related to additional revenue contribution to capital as approved by the Executive Committee in September.
The Principal Accountant advised Members that the level of funding was forecast to exceed the original budget by £835k. The majority of the additional funding, £606k was due to the Treasury making additional funds available to respond to the Covid-19 Pandemic. Furthermore, following the Grenfell Enquiry, the government had allocated funds specifically for the fire sector protection teams to carry out a review of all high-rise buildings and support initial improvements in local protection capability. This had resulted in additional in-year funding of £230k.
The Principal Accountant advised Members that most of the capital works related to West Ashland which was now in occupation by the fire service. The forecasted year-end variance for property review of £2.686m was expected to be offset by additional capital receipts and contributions which would result in a net variance of around £1m against the forecast expenditure.
That the latest projected outturn forecast for the Authority as at 30 September 2020 be noted.