Agenda item

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

This report will provide an update on the Quarter 3 budget monitoring and will seek approval for any budget changes required to respond to the changing financial scenario and the delivery of the MTFS.

The Cabinet Member for Finance and Strategic Regeneration introduced the report which provided an update on the Quarter 3 budget monitoring and sought approval for any budget changes required to respond to the changing financial scenario and the delivery of the MTFS.

The Cabinet Member was pleased to be able to report that the General Fund budget position now presented had remained stable for the third quarter and delivery of agreed savings remains in a more robust position. The Cabinet Member outlined that this was due to the decisions taken when setting this year’s budget which sought to ensure that it was set to be as realistic as possible within the overall available resource envelope. Furthermore, the two most significant drivers of the reported overspend at quarter three had been recognised and addressed in the 2020/21 Budget recently approved by Full Council.

The Cabinet Member advised that, despite this positive direction of travel, this still left a, not insignificant, £5.5m forecast overspend on the General Fund. He stressed to officers and Lead members the need to actively focus on identifying options to bring the overall General Fund budget back to a balanced position by the end of the year. To optimise the resilience of the 2020/21 Budget, the Council must do all it can to balance this year’s budget without the need to draw down on reserves.

The Cabinet Member informed that the forecast DSG outturn had worsened by £0.3m since his last report. This continues to be a matter of real concern and pressure continues to be put on Government to recognise this issue and come forward with a sustainable solution. As outlined in the report, it was hoped to have some feedback from the DfES however, it still did not provide the full clarification on what is required in terms of a permanent resolution of the funding shortfall nor the proposal to address the deficits. Again, the Cabinet Member hoped to be able to provide a more favourable update in the next report.

In response to questions from Councillors Ogiehor, the following information was provided:

·         The Cabinet Member noted that corporate solutions were contingency measures by which the Council could put in place to deal with financial issues that arose with the budget.

·         Regarding the underspend in table 4 on page 202, the Cabinet Member noted this was due to a delay in implementing projects. The underspend would be addressed once the Council began to deliver the projects. However, some of the delays to projects were caused by contractors but the Council had to ensure that the money was available for when those projects commenced.

·         Regarding the £1.1 million underspend in IT Digital Services, Officers noted this was as a result of a number of budgets coming back to the Council following the Shared Digital project not going ahead

RESOLVED

1. To note the forecast revenue outturn for the General Fund (GF), including savings pressures, of £5.5m overspend (£5.2m Qtr2) (Section 6, Table 1, and Appendix 1) and that it is expected that this can be addressed via one-off corporate solutions.

2. To note the net HRA forecast of £0.4m underspend (£0.4m Qtr2) (Section 6, Table 2, and Appendix 2).

3. To note the net DSG forecast of £5.4m overspend (£5.1m Qtr2), the actions being taken to seek to address this and the potential implications for the GF (Section 7 and Table 3).

4. To note the forecast budget savings position in 2019/20 which indicates that 15% (£1.957m) will not be achieved. (Section 8, Table 4 and Appendix 3). This is incorporated into the GF budget pressure in recommendation 3.1.

5. To note the forecast capital expenditure of £150.1m in 2019/20 which equates to 50% of the revised capital budget (Section 9, Table 5 and Appendix 4).

6. To approve the revenue budget virements (Appendix 5).

7. To note the debt write-off approved in quarter three (Appendix 6).

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.

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.