Agenda item

[Report of the Director of Finance.  To be introduced by the Cabinet Member for Finance and Transformation]

The Cabinet Member for Finance and Transformation introduced the report which set out the position at Quarter 2 (Period 6) of the 2021/22 financial year including General Fund (GF) Revenue, Capital, Housing Revenue Account (HRA) and Dedicated Schools Grant (DSG) budgets. The report focused on significant budget variances including those arising as a result of the forecast non-achievement of approved MTFS savings as well as the best estimates of the ongoing impact of the Covid-19 pandemic (C19) on the Council’s financial plans.  The Cabinet Member highlighted that the overall general fund revenue position had worsened from the first quarter of the financial year, largely due to the ongoing impacts of Covid on our demand led services.  Pandemic related pressures, had stabilised, and it was anticipated that the in-year impact of the pandemic would be offset by various government funding streams.  The Council would continue to monitor and report on this throughout the year.

The Cabinet Member and Officers responded to questions from Councillor Cawley-Harrison:

-               Officers were working to establish the drivers behind the variances – over half of variances related to the direct consequences from Covid, and majority of those would be met in form of emergency grants from the government.  The net gap forecasting caused directly by Covid was around £1million.  It was worth noting that none of the primary factors around the variances were particular to Haringey.  Officers were looking to identify any measures which might go towards responding to the funding gap.

-               Court income – the ability to pursue liabilities owed to Authority through the legal system had been impaired by court closures.  It was still difficult to get a case before the courts, and this reflected on the Council’s ability to recover arrears and court cost income.

RESOLVED that Cabinet

1.         Note the forecast base budget revenue outturn for the General Fund of £10.2m and that Directors are seeking actions to bring the forecast down before the end of the year. (Section 6, Tables 1a and 1b, and Appendix 1).

2.         Note that the £12.87m forecast Covid pressure on the GF is expected to be offset by Government funding (Section 6 and Table 1a).

3.         Note the net Housing Revenue Account (HRA) forecast of £1.0m overspend (Section 6 and Appendices 1 and 2).

4.         Note the net DSG forecast of £6.98m overspend. (Section 6 and Appendix 1).

5.         Note the forecast budget savings position in 2021/22 which indicates that £5.8m (55%) may not be achieved. (Section 6 and Appendix 3).  This is incorporated in the GF budget pressures addressed in recommendations 3.1 and 3.2 above.

6.         Approve the proposed budget adjustments and virements to the capital programme as set out in Table 2 and Appendix 6.

7.         Note the forecast expenditure of £287m in 2021/22 which equates to 62% of the revised capital budget (Section 8 and Appendix 4). 

8.         To approve the revenue budget virements and receipt of grants as set out in Appendix 6.

9.         To note the debt write-offs approved by officers in Quarter 2 2021/22 (Appendix 7).

10.       To note the C19 grants schedule (Appendix 8).

Reason for Decision

A strong financial management framework, including oversight by Members and senior management, is an essential part of delivering the council’s priorities and statutory duties.  This is made more critically important than ever as a result of the on-going financial implications placed on the Council by the Covid-19 crisis.

Alternative Options Considered

The report of the management of the Council’s financial resources is a key part of the role of the Director of Finance (Section 151 Officer) in helping members to exercise their role and no other options have therefore been considered.