Agenda item

The Quarter 2 Budget Monitoring Report as presented to Cabinet at its meeting on 10 November is attached for the Committee to consider.

Contributors:

Katrina Wood, Deputy Leader and Cabinet Member for Resources

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

Paper:

Q2 Budget Monitoring Report

Katrina Wood, Deputy Leader and Cabinet Member for Resources presented the Q2 Budget Monitoring Report which was presented to Cabinet at its meeting on 10 November 2020.

The report set out the Revenue and Capital outturn position for Buckinghamshire Council for the financial year 2020/21 and appended was a full analysis of the forecast outturn for each of the Council’s six Directorates. The forecast revenue outturn was an overspend of £4.9m, which had reduced from the £6m reported for quarter 1 through additional funding and active management of overspends. The forecast Capital outturn was £174.7m, representing slippage of £15.7m. This was an increase of £10.5m from the £5.2m reported at Quarter 1. Mitigating actions to address the in-year forecast revenue overspend included continued lobbying of government for the full recovery of all additional expenditure and lost income in relation to Covid-19, action within Directorates to identify additional mitigations, as well as the review of commitments against earmarked reserves and corporate contingencies included within the budget.

Ms Wood advised that so far the Council had claimed £5.4 million for the first 4 months of the financial year (April to July). These figures did not take into account the recent government announcement of an additional £1 billion for local authorities, which allocated the Council a further estimated £3.5 million government grant relating to the impact of Covid. This has had a positive impact on this outturn position but would not show until the next quarter. Cllr Wood explained that whilst this funding was welcomed, it was less than the Council was expecting based on previous allocations and furthermore it did not take into account the implications of the current lockdown which was likely to have a significant impact on the Council’s income levels like parking and would have a negative impact on the next outturn position.

In terms of the other revenue pressures in business as usual; the main pressures were within Children Services and related to home to school transport costs and reduced income of £3.9 million and also the looked after children placement costs of £1.2 million. These pressures were partly offset from within corporate contingencies where some budget was approved to cover the key financial risks facing the authority. All directorates were now looking at mitigating actions to bring their service areas back into balance and appendix 1 set out the details of the variances by each directorate. The Council was also reviewing the remaining corporate contingencies and ear marked reserves to ensure a break even position by the end of the financial year.

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

• In relation to financial pressure on care homes, it was recognised that many were struggling financially due to current circumstances and the Council was working closely with the sector to understand the position and provide support as best it could. The Council recognised the importance of care homes in providing for care needs now and in the future. The issue was described as a national risk and the Council understood that if any were to go in to administration or face closure there would be significant costs involved with the moving of vulnerable adults.
• The Committee was advised that at the point the budget was set the Government Dedicated Schools Grant was not known, however the grant was the reasoning behind the income listed at page 56 of the reports pack under education.
• It was noted that there were no covid costs reported under business management and the Committee was advised that many of these costs were dealt with as senior managers and their teams covered many areas of work within their roles.
• In response to a question on the amount received by the Council from Government in the last round of funding support, Ms Wood explained that the Government had re-worked its algorithms which had meant significantly less was received than what was expected. During the first tranche amounts had been heavily based around social care formulas, however on this occasion there was more weight placed on deprivation and areas with higher covid case numbers. The Council had been unaware of this change and lobbying was underway to have this addressed in future allocations. The Committee recognised this was a risk the Council would be exposed to as and when future funding was allocated.
• It was queried whether the capital budget was achievable as in predecessor Council’s it had often appeared optimistic. The Committee was advised that with the five councils having been brought together each with their own respective capital programmes, work was underway to look at ensuring there was minimal slippage and the forecast outturn was realistic. It was further noted that the former County Council had already done work on looking at slippage which resulted in a low percentage for 2019/20, although this would be expected to increase this financial year due to the pandemic amongst other issues. This would be an area the budget scrutiny inquiry group would look at in more detail in its January meetings.