Agenda item

Tim Butcher, Deputy Cabinet Member for Resources and HR, introduced the report which set out the overview of the financial Revenue and Capital outturn position for Buckinghamshire Council for the financial year 2020/21.  The report took into account the pressures relating to Covid-19 and also the business as usual activity.  The outturn would be subject to external audit and to continued pre-audit quality checks.

The Revenue outturn was an underspend of £0.4m, that was an improvement of £0.5m over the forecast reported for Quarter3 and had been achieved through additional Covid-19 funding and active management of overspends.  This comprised an adverse directorate variance of £47.6m, offset by a favourable corporate position of £48.0m.

Members were informed that the Council’s first year had been exceptionally challenging for financial management.  The challenges of bringing together the different systems, policies and practices of the legacy councils continued and had been exacerbated by the impact of the pandemic on ways of working.  Appendix 2 provided an indication of the scale of the Council’s response to the pandemic itself and the management and maximisation of the multiple associated funding streams continued to provide a challenge.

The revenue budget outturn was detailed in Appendix 1 which also explained the key Directorate variances.  The outturn variances were split between Business as Usual and those relating to the Covid-19 response.

While many Councils nationally had struggled with their financial positions over the last year, both as a result of existing pressures, and exacerbated by the impact of Covid-19, the Buckinghamshire Council had delivered against both of these and as a result of Covid-19 continued to hold circa £47m of General Fund Reserves.   Given the unpredictability of many of the Council’s demand led services it was essential that a reasonable level of reserves was maintained. This reserve constituted just over 10% when compared to our net operating budget of £459m.  It was anticipated that the Council would be able to drive out further efficiency savings as a direct result of becoming a unitary authority over the next few years and these would be considered as part of the Medium Term Financial Plan.

In relation to the impact of the pandemic increased service costs and lost income had meant a directorate overspend of £46.6m. However, this has been completely offset through un-ringfenced government grant meaning a neutral overall impact in relation to Covid.  A breakdown of pressures arising from Covid were at Appendix 2.

In terms of Business as Usual activities there was a £1.0m Directorate overspend, which had been more than offset through a corporate underspend of £1.4m in relation to un-ringfenced grants and unreleased contingencies.  The most significant movements in Directorate outturn positions since Q3 had been:

-                 the allocation of Disabled Facilities Grant (DFG) to fund equipment spend in Adults;

-                 an increase in expenditure on Home to School Transport within Children’s Services;

-                 the impact of COVID 19 on Waste costs within Communities Directorate; and

-                 the increased use of COVID grants to fund pressures.

Full details of these movements were contained in Appendix 1, which also had performance information relating to Late Payments and Sundry Debts.

Capital Budget Outturn

The capital programme outturn position was £169.5m, with underspend/slippage of £34.4m (16.9%).  This represented an increase of £6.7m from Quarter 3.  Over 75% of the slippage related to expenditure on budgets which have not been released.  This was primarily due to delays caused by the impact of COVID-19 and the five legacy councils becoming a Unitary Council.

Significant slippage / underspends had been reported in:

-                 Children’s Services (£1.2m).

-                 Communities (£10.5m).

-                 Planning, Growth & Sustainability (£22.3m)

The Children’s Services slippage related to the Secondary School Places programme, where restricted site access had delayed progress.  However, it had proved possible to accelerate spend on Primary School Places, thus mitigating some of the impact reported in Q3.  The Communities slippage related to Culture, Sport & Leisure of £3.8m, Highways & Technical Services of £4.9m and Neighbourhood Services of £1.8m.  The impact of COVID and severe weather had increased slippage since the Q3 forecast.  Planning, Growth and Sustainability slippage largely comprised re-profiling of schemes with unrealistic expenditure profiles inherited from the legacy councils.  Detail of the projects could be found in Appendix 1.

A key risk for the Council to manage moving forward would be to respond to income levels as business returned to normal, e.g. income from car parking and Council owned properties, which could be impacted if the 21 June date for re-opening the economy was delayed.  The Council would also need to be responsive to anticipated demand that had arisen due to Covid but had not yet been identified.

With regards to the financial positions of leisure providers, Members were informed that while Centres were open many classes were still not running to full capacity due to the need to have social distancing measures in place.  It was anticipated that leisure providers income streams would rebound quickly when they were able to open without restrictions.  Financial planning for 2021-22 had taken into account that the Council might not receive all management fees due from leisure providers.

The Leader drew to everyone’s attention Table 1 (Summary of Council Revenue budget outturn) at page 25 of the agenda pack, which provided a good summary of corporate expenditure during the year and funding provided from the Government and other sources that had resulted in the final revenue outturn position that was an underspend of £0.4m.

RESOLVED –

That the current forecast outturn for the financial year 2020/21 and the latest estimates of impacts and funding related to Covid-19 be noted.