Agenda item

Report FSD20046

The report considered the 2019/20 provisional outturn at portfolio level and Council wide as well as the potential implications for the Council’s financial position in 2020/21. The purpose of the report was to give a broad overview of the financial outturn.  The 2019/20 provisional outturn provided for no variation in general fund balances, subject to the recommendations in the report being agreed.  More detailed reports would be submitted to individual PDS Committees in due course. Details of the carry forward requests and a summary of the Council’s capital programme were also considered in the report.

In response to enquiries from a Member concerning further detail around income from investment properties, the Director of Finance confirmed that reports on Treasury Management were produced twice a year and the Committee had also previously agreed that Income from Investment Properties monitoring reports were presented with the same frequency. The Chairman advised that the income from investment properties report was due in September 2020 and Members suggested that it would be helpful to have the Income from Investment properties report at the July 2020 meeting if this were possible.

The Director of Finance confirmed that through being a part of the Business Rate Pool the Council was estimated to have received an additional £2.3m in 2019/20.  Members noted that there could be potential losses in 2020/21 as a result of the impact of the COIVD-19 pandemic on business but it was not yet possible to quantify the overall financial impact.

In response to a question, the Director of Finance explained that the majority of business rates collected was passed onto the Government and the GLA.  There is a part retained by the Council which forms part of the Council’s overall funding assessment by Government. 

Turing to the issue of underspends on staffing within the Finance Division, the Director of Finance confirmed that the vacancies had impacted on the Team and that the work required of the Team had only been delivered as a result of the commitment and dedication of staff.  The Director of Finance explained that there was difficulty recruiting good finance staff, stressing the importance of ensuring that a skilled workforce was in place to manage the large council budgets.  However, the ongoing staff vacancies were not sustainable going forward and the position would be reviewed over the coming year.

In response to a question, the Director of Finance explained that across the Council as a whole there were growth pressures which the Transformation Programme was seeking to address.  Departments were continually looking at value for money and were seeking to keep costs low but there were a number of challenges.  Members noted that there were two key issues for 2020/21 – the impact of COVID-19 and what the Government would do about local authority funding.  In light of these challenges, the Director of Finance stressed the importance of maintaining rigor in the budgetary process by considering mitigation before approving growth and containing cost pressures where possible.

In response to a question surrounding government reimbursement for lost parking income, the Director of Finance explained that the situation was currently very fluid.  At the start of the response to the COVID-19 pandemic the Government had given an indication to provide adequate funding  for any net costs arising from Covid-19.  However, over the course of the pandemic it was becoming less clear and there has been reference made to Local Authorities sharing the burden although the Government had said that Council’s would be reimbursed for the things they had been asked to do.  Ultimately it remained unclear whether there would be any reimbursement of lost income.

The Committee noted that there continued to be pressures within the Corporate Services division with an overspend in Legal Services.  The Director of Corporate Services explained that there had been some budgetary pressures around the planning legal function with the need to fund counsel to support the Local Plan process and respond to the subsequent legal challenge to the Local Plan.  There also remained budgetary pressures arising from children’s social care which were being addressed through the Transformation Programme.

It was noted that the issue of the £500,000 increase in the cost of the Home and Hospital Education Service would be raised at the informal meeting of the Children, Education and Families PDS Committee which was due to take place on 18^th June 2020..

In relation to the Council’s Audit function, the Director of Finance confirmed that external audit fees were included in the audit budget with the cost of any objection to the accounts being reported to Audit Sub-Committee.  Members noted that as a result of objections to the accounts in recent years the cost of external auditors had been increasing year on year as the external auditors from three years ago were still dealing with complaints about that set of accounts and these were costs that were outside the control of the Council.

At the conclusion of the discussion it was unanimously

RESOLVED: That the Leader be recommended to

1.  Consider the provisional revenue and capital outturns for the 2019/20 financial year and the earmarked balances on the General Fund as at 31^st March 2020;

2.  Consider the variations in 2019/20 impacting on the Council’s 2020/21 financial position;

3.  Consider the comments from Chief Officers as detailed in Appendix 2 of the report;

4.  Approve the requests for carry forwards totalling £910k (net) as detailed in Appendix 6 of the report, subject to the funding being allocated to the Central Contingency in 2020/21 to be drawn down on the approval of the relevant Portfolio Holder;

5.  Agree the release of £315k from the 2019/20 Central Contingency as detailed in paragraph 3.6.2 of the report;

6.  Agree the release of £52k from the 2019/20 Central Contingency as detailed in paragraph 3.6.3 of the report;

7.  Agree the release of (£2,200k) from the 2019/20 Central Contingency as detailed in paragraph 3.6.4 of the report;

8.  Agree the release of £28k from the 2019/20 Central Contingency as detailed in paragraph 3.6.5 of the report;

9.  Agree the release of £25k from the 2019/20 Central Contingency as detailed in paragraph 3.6.6 of the report;

10.Note the return to contingency of £474k of additional grant to the 2019/20 Central Contingency as detailed in paragraph 3.6.7 of the report; and

11.Agree that a sum of £8,821k be set aside as a contribution to the Housing Invest to Save Fund earmarked reserve as detailed in paragraph 3.7.2 of the report.