Agenda item

2020-21 Provisional Financial Outturn

Minutes:

The Committee received a report which set out the Council’s provisional financial outturn for 2020/21. The report was introduced by Frances Palopoli, Head of Corporate Financial Strategy & Monitoring as set out in the agenda pack at page 55 of the agenda pack. The Committee noted that the report summarised the financial implications for the Council arising from the previous year. Officers advised that the burden of Covid on the Council was broadly covered by the government. Other non-Covid pressures were offset by the draw down from the Council’s budget contingency. The following arose during the discussion of the report:

a.    The Committee queried a seeming inconsistency in the report in regards to the Street Space budget with different figures offered of £270k and £5.1m. In response, officers advised that the capital budget for the overall Street Space scheme was £5.1m but the £270k related to a budget adjustment made in year in order to accelerate expenditure on the wider programme.

b.    The Committee queried the reasons why the earmarked reserves of the Council had increased from £84.5m in 2020 to £115m in 2021. In response, officers advised that the central government grant funding for Covid, including grant relief for Council Tax totalled C. £20m. This funding needs to be put on the balance sheet and paid out in the current year. The remaining £10.4m  was aligned to the collection fund and the surplus generated in 2019/20, which was shown on the balance sheet for the current year.

c.    The Committee queried whether the level of reserves could be expected to drop in future years, officers advised that the un-earmarked reserves naturally fluctuated and there was no ‘normal year’. However, it was reasonable to assume that there would be less draw down on reserves in future years.

d.    In relation to a question about London Councils evaluating the amount of money received from central government, officers advised that they were not aware of these discussions and could not comment. 

e.    The Panel queried the use of RAG ratings on the savings tracker and in particular queried the use of a green RAG status if the saving was expected to slip in full. Officers agreed to look into whether the ratings were incorrect and come back to the Panel. The Panel asked for an updated table in the Q2 report. (Action: Frances Palopoli).

f.     The Committee raised concerns about underspend in the disability services grant and suggested that this should be prioritised. Officers responded that this area was acutely hit by Covid but that the grant had been carried over into the current year so it was expected that the Council would fully catch up on this.

g.    In relation to a question around the impact of Covid on Council Tax collection, officers advised that the impact would be felt on subsequent years as the government allowed local authorities to spread costs over three years. There was a £20m spend from reserves in this budget from last year’s funds. The Council regularly reviewed its bad debt provisions and that increased provisions had been set aside for resilience and bad debt provision in the wake of Covid-19.

 

RESOLVED

 

The Overview and Scrutiny Committee:

 

  1. Noted that the figures in the 2020-21 Provisional Financial Outturn remain provisional until the conclusion of the statutory audit process which has been extended due to the on-going impact of the C19 pandemic.

 

  1. Noted that the C19 financial impact on the 2020-21 General Fund was offset by Government support.

 

  1. Noted that non-C19 related pressures forecast during the year were mitigated by year end.

 

  1. Noted that the C19 pandemic was forecast to continue to impact on the Council’s finances during 2021-22 and the assumptions made around mitigating these.

 

  1. Noted that statutory comments are included in the original report to Cabinet.

 

 

 

 

 

Supporting documents: