Subject:
|
Targeted Budget
Management (TBM) 2021/22:
Month 5 (August)
|
Date of Meeting:
|
7 October 2021
|
Report of:
|
Acting Chief Finance
Officer
|
Contact Officer:
|
Name:
|
Jeff Coates
|
Tel:
|
29-2364
|
|
Email:
|
Jeff.Coates@brighton-hove.gov.uk
|
Ward(s)
affected:
|
All
|
FOR GENERAL RELEASE
1
PURPOSE OF REPORT AND POLICY CONTEXT:
1.1
The Targeted Budget Monitoring (TBM) report is a key component of
the council’s overall performance monitoring and control
framework. This report sets out an indication of forecast
risks as at Month 5 on the council’s revenue and capital
budgets for the financial year 2021/22. As last year, the report
includes memorandum information to indicate the element of the
forecast attributable to the ongoing pandemic.
1.2
The forecast risk for 2021/22 at month 5 (August) is a
£4.159m overspend on the General Fund revenue budget. This
includes a forecast underspend of £0.843m on the
council’s share of the NHS managed Section 75 services. The
committee are advised that some aspects of the forecast remain
challenging to assess in terms of the potential ongoing impact of
the pandemic on the local economy, visitor activity and the
associated demands this can place on services. For example,
cessation or changes in eviction legislation, furlough, Universal
Credit top-up’s and/or other Covid support could have
significant financial implications.
1.3
The report indicates that £3.395m (32%) of the substantial
savings package in 2021/22 of £10.687m is at risk. Of this,
£0.890m is due to pressures arising from Covid-19.
1.4
With regard to the Capital Investment Programme, this continues to
be affected by the pandemic and re-profiling of costs into future
years remains higher than normal.
2
RECOMMENDATIONS:
2.1
That the Committee note the forecast risk position for the General
Fund, which indicates a potential forecast overspend risk of
£4.159m. This is net of an underspend of £0.843m on the
council’s share of the NHS managed Section 75 services.
2.2
That the Committee note the forecast for the Housing Revenue
Account (HRA), which is currently an overspend of
£0.978m.
2.3
That the Committee note the forecast risk position for the
Dedicated Schools Grant which is an overspend of
£0.475m.
2.4
That the Committee note the forecast outturn position on the
capital programme which is a forecast underspend of £3.959m
and approve the variations and slippage in Appendix 6 and new
schemes as set out in Appendix 7.
2.5
That the Committee agree to allocate the remaining 2021/22 Contain
Outbreak Management Funding of £1.615m to cover
pandemic-driven pressures across Homelessness and Rough
Sleeping.
3
CONTEXT/ BACKGROUND INFORMATION
Targeted Budget
Management (TBM) Reporting Framework
3.1
The TBM framework focuses on identifying and managing financial
risks on a regular basis throughout the year. This is applied at
all levels of the organisation from Budget Managers through to
Policy & Resources Committee. Services monitor their TBM
position on a monthly or quarterly basis depending on the size,
complexity or risks apparent within a budget area. TBM therefore
operates on a risk-based approach, paying particular attention to
mitigation of growing cost pressures, demands or overspending
through effective financial recovery planning together with more
regular monitoring of high risk demand-led areas as detailed
below.
3.2
The TBM report is normally split into the following sections:
i)
General Fund Revenue Budget Performance
ii)
Housing Revenue Account (HRA) Performance
iii)
Dedicated Schools Grant (DSG) Performance
iv) NHS
Controlled S75 Partnership Performance
v)
Capital Investment Programme Performance
vi)
Capital Programme Changes
vii)
Implications for the Medium Term Financial Strategy (MTFS)
viii) Comments of the Chief
Finance Officer (statutory S151 officer)
4
General Fund Revenue Budget Performance (Appendix 3)
4.1
The table below shows the provisional outturn for Council
controlled revenue budgets within the General Fund. These are
budgets under the direct control and management of the Executive
Leadership Team. More detailed explanation of the variances can be
found in Appendix 4. Please note that the ‘COVID Variance
Month 5’ column is a memorandum-only column identifying the
extent of the ‘Forecast Variance Month 5’ attributable
to the pandemic.
Forecast
|
|
2021/22
|
Forecast
|
Forecast
|
COVID *
|
Forecast
|
Variance
|
|
Budget
|
Outturn
|
Variance
|
Variance
|
Variance
|
Month 2
|
|
Month 5
|
Month 5
|
Month 5
|
Month 5
|
Month 5
|
£'000
|
Directorate
|
£'000
|
£'000
|
£'000
|
£'000
|
%
|
557
|
Families, Children & Learning
|
98,137
|
98,660
|
523
|
547
|
0.5%
|
212
|
Health & Adult Social Care
|
71,219
|
70,446
|
(773)
|
198
|
-1.1%
|
4,227
|
Economy, Environment & Culture
|
42,759
|
46,188
|
3,429
|
4,200
|
8.0%
|
891
|
Housing, Neighbourhoods & Communities
|
25,493
|
27,476
|
1,983
|
1,951
|
7.8%
|
465
|
Finance & Resources
|
22,970
|
23,950
|
980
|
3
|
4.3%
|
0
|
Strategy, Governance & Law
|
6,176
|
6,157
|
(19)
|
0
|
-0.3%
|
6,352
|
Sub Total
|
266,754
|
272,877
|
6,123
|
6,899
|
2.3%
|
(147)
|
Corporately-held Budgets
|
(71,014)
|
(72,978)
|
(1,964)
|
49
|
-2.8%
|
6,205
|
Total General Fund
|
195,740
|
199,899
|
4,159
|
6,948
|
2.1%
|
* The
COVID-19 Grant for 2021/22 is £8.023m but has been treated as
recurrent funding to balance the 2021/22 budget and does not
therefore show as a one-off grant above.
4.2
The General Fund includes general council services, corporate
budgets and central support services. Corporate Budgets include
centrally held provisions and budgets (e.g. insurance) as well as
some cross-cutting value for money savings targets. Note that
General Fund services are accounted for separately to the Housing
Revenue Account (Council Housing). Note also that although part of
the General Fund, financial information for the Dedicated Schools
Grant is shown separately as this is ring-fenced to education
provision (i.e. Schools). The chart below shows the monthly
forecast variances for 2021/22 and the previous three years for
comparative purposes. The impact of the pandemic clearly makes
comparisons difficult at this time.
Demand-led Budgets
4.3
There are a number of budgets that carry potentially higher
financial risks and therefore could have a material impact on the
council’s overall financial position. These are budgets of
corporate significance where demand or activity is difficult to
predict and where relatively small changes in demand can have
significant implications for the council’s budget strategy.
These can include income related budgets. These therefore undergo
more frequent and detailed analysis.
Forecast
|
|
2021/22
|
Forecast
|
Forecast
|
COVID
|
Forecast
|
Variance
|
|
Budget
|
Outturn
|
Variance
|
Variance
|
Variance
|
Month 2
|
|
Month 5
|
Month 5
|
Month 5
|
Month 5
|
Month 5
|
£'000
|
Demand-led
Budget
|
£'000
|
£'000
|
£'000
|
£'000
|
%
|
311
|
Child Agency & In House Placements
|
22,828
|
23,573
|
745
|
201
|
3.3%
|
1,878
|
Community Care
|
82,898
|
82,224
|
(674)
|
0
|
-0.8%
|
807
|
Temporary Accommodation
|
10,190
|
13,818
|
3,628
|
2,996
|
35.6%
|
2,996
|
Total Demand-led Budget
|
115,916
|
119,615
|
3,699
|
3,197
|
3.2%
|
The chart below
shows the monthly forecast variances on the demand-led budgets for
2021/22.
TBM Focus Areas
The main pressures
identified at Month 5 are across parts of Families, Children &
Learning, Homelessness, Transport, City Environmental Management
and Culture, Tourism & Sport. Information about these pressures
and measures to mitigate them are summarised below:
4.4
Families, Children & Learning: The current projected
position identifies potentially significant cost pressures:
£0.732m on Services for Children with Disabilities;
£0.126m on Services for Adults with Learning Disabilities and
Council Nurseries £0.150m. However, there is a forecast
underspend on Children’s Social Care Services of
(£0.452m) and Home to School transport of (£0.101m)
together with other variances of £0.068m, this results in a
forecast of £0.523m overspend as at Month 5.
£0.547m of the forecast overspend
relates to Covid-19 – this is a combination of loss of
income, impact on savings targets and additional expenditure given
the need to mitigate health risks posed by Covid-19. Work
will continue in implementing financial recovery plans but it is
anticipated that demand for statutory social care services could
increase as families exit lock down.
The projected
position for the Dedicated Schools Grant is an overspend of
£0.475m. This is largely due to some significant overspends
in the high needs block, most notably education agency placements
£0.605m. These pressures are offset by the remaining balance
of the central DSG carried forward from 2020/21.
4.5
Adults Services: Challenges remain across the service from
increasing demands from client needs, supporting more people to be
discharged from hospital when they are ready and maintaining a
resilient local provider market to avoid high unit costs. This is
alongside supporting vulnerable clients during the coronavirus
pandemic, delivering a significant financial recovery plan and
developing integration plans through the Better Care Fund.
·
Although the overall position is favourable, this is only after
applying service pressure funding of £12.700m in 2021/22
which has been used to fund budget pressures resulting from the
increased demands and complexity in the city. Funding of
£0.361m was also needed to backfill the reduction in CCG
funding contributions. Over the last three years there has been an
overall £3.750m reduction in CCG funding due to pressures on
local NHS budgets.
·
At
this stage, £1.611m of the £4.515m 2021/22 savings plan
are being forecast as unachievable in this financial year. To
maintain this position, actions are focused on attempting to manage
demand on and costs of community care placements across Assessment
Services and making the most efficient use of available
funds.
·
The
HASC directorate has a Modernisation Programme which aims to
implement a consistent strengths-based approach across key work
streams, ensuring robust pathways are in place, developing a
community reablement offer and re-designing the front door service.
Currently the Health & Social Care system is under considerable
pressure and this is generating additional costs for the council
due to:
o
Pressures on NHS
budgets resulting in reduced funding contributions from the
CCG;
o
Significant
pressures on the acute hospital resulting in increased costs to
support timely discharge into residential and nursing home
care;
o
Ongoing
transformation of GP practices and enhancement of their clinical
screening and general medical services which contribute to
preventative support;
o
Pressures on NHS
outreach and other preventative services including community
nursing (known as Integrated Primary Care Teams);
o
There
is also focus nationally on improving rates of hospital discharge
in order to accommodate winter pressures.
The funding of all care packages is scrutinised for Value for
Money, ensuring that eligible needs are met in the most
cost-effective manner which will not always meet people’s
aspirations. Established safeguards are in place to provide
assurance within this process.
4.6
Housing Services and Temporary Accommodation: The budget for
Temporary Accommodation is currently forecast to overspend by
£0.632m. This pressure relates partly to the budget
assumption for Rough Sleeper funding which included £1m
increased funding relating to the government announcement of
£254m funding nationally of which £151m was new funding
and was expected to provide at least £1m additional core
funding to the council. This funding was not confirmed in the Local
Government Financial Settlement (LGFS) and this has caused some
presentational and analytical issues.
In the event, in May 2021, government
announced funding of £203m nationally, however, this not only
subsumed the previous announcement but also covered a number of
other funding streams including Rough Sleeper Initiative (RSI4),
Next Steps Accommodation Programme (NSAP) continuation, and other
Covid support. Some elements of the funding therefore came with
specific conditions to provide additional services. Therefore,
although core funding has increased overall, it has not increased
by £1m compared to 2020/21 core funding thereby creating a
budget pressure.
This pressure is partially offset by an
underspend of £0.368m reflecting that the new Emergency
Accommodation (EA) contracts are unlikely to be in in place until
April 2022 and therefore the estimated extra costs will not occur
until the new financial year. This forecast assumes that the
numbers in EA (excluding emergency hotels discussed separately
below), will remain at a similar level for the remainder of the
year (average level of 627 units). Move-ons from EA are proving
challenging while the service prioritises moving on those housed in
hotels under the 'Everyone In' initiative. By assuming numbers
remain high, this allows for some of the risks around homelessness
increasing as a result of the ending of the moratorium on private
landlord evictions together with potential implications with the
ending of the government's furlough scheme, although numbers are
very difficult to predict at this time.
There is a forecast overspend on the
cost of the additional emergency hotel accommodation originally
acquired early in the pandemic. The forecast spend has increased by
£1.923m since the forecast at Month 2 leading to an overspend
of £2.730m. While the rough sleepers are being moved-on and
the projection is for move-on’s to be completed by the end of
November, the impact has been that other statutory homeless people
have not been able to move-on as there is insufficient supply of
accommodation to move-on all groups at the same time and priority
has been given to those originally housed under the 'Everyone In'
initiative during the pandemic.
Also, so far this year, any
move-on’s have been largely replaced with new placements and
so it will not be possible to decant all of the hotels as
originally planned. The forecast therefore assumes that an
estimated 136 rooms will be required to 31 March 2022 to house
those that the council owes a homeless duty to. The service is
currently experiencing high demand in its supported accommodation
which means that move on options for those in hotels are limited.
The current costs of this service are high with an average gross
cost of approximately £80 per person, per night due to the
high costs of damages and repairs, security costs and food. Housing
Benefit (HB) income is also lower than expected, however, this is
explained to some degree by the fact that the hotels are also being
utilised for emergency accommodation clients and so the HB income
for these is included in the forecast for Temporary Accommodation
above. The forecast assumes the use of £2.043m in Containment
Outbreak Management Fund (COMF) Grant as agreed at P&R
Committee 28 April 2021 and the use of £0.500m grant from
MHCLG for continued housing of rough sleepers as included in the
original budget assumptions.
The service will continue to work to
improve this overspend position as the year progresses and has put
in place a Financial Recovery Plan for Temporary Accommodation to
reduce the forecast costs by £1.815m as summarised in
Appendix 4. The service has already reduced the forecast spend by
£0.370m when compared to an interim forecast at Month 4 and
the Financial Recovery Plan includes a further £0.200m in
cost reduction measures. As part of this Plan, this report is
recommending the use of the remainder of the 2021/22 COMF grant
funding of £1.615m to support the continuing pressures caused
by the pandemic of those in emergency accommodation to whom the
council owes a Housing duty. This will be kept under review and, if
possible, additional cost reductions will be sought to reduce the
overspend further. The service has recently employed the services
of a Homelessness Transformation Manager to head up an ‘end
to end’ improvement programme to help the service improve its
processes to reduce the use and length of stay in Temporary
Accommodation by improving homeless prevention and enabling move on
to more sustainable accommodation. This in turn should also lead to
cost reductions by improving move-on processes, void turnaround
times in emergency accommodation, and improving income collection
for example.
The council commissions services to
assist rough sleepers and those in supported housing. This service
is forecast to overspend by £0.276m during 2021/22. The main
reasons for this are an estimated £0.140m cost of a SWEP
(Severe Weather Emergency Protocol) building for 6 months as a
result of not being able to use congregate accommodation due to
Covid-19. There is also a forecast £0.174m overspend on
support for those rough sleepers housed in the 'care and protect'
hotels and for a further 3 months, July to September. These
overspends are offset by other minor underspends of
£0.047m.
4.7
Environment, Economy & Culture: The Directorate
has substantial income budgets for parking, planning and venues and
for the council’s commercial property portfolio, all of which
are dependent on visitor numbers and commercial activity.
There is also a challenging additional income target for Parking
Services of £1.750m for 2021/22. These activities and
services have been heavily impacted by the Covid-19 restrictions
and the forecast is for significant income shortfalls compared to
budget for 2021/22 in most of these areas.
The Sales, Fees & Charges
Compensation Grant has reduced the impact of some of these lost
incomes. There may be some recovery following improvements to
tourism and visitor numbers as behaviours change following the
lifting of restriction. However, there are also unavoidable cost
pressures (mainly agency staffing) related to maintaining core
services, such as refuse collection & recycling and street
cleansing. The overall effect of these factors is a forecast risk
of £3.429m for Month 5 which is an improvement of
£0.798m compared to £4.227m at Month 2.
Monitoring Savings
4.8
The savings package approved by full Council to support the revenue
budget position in 2021/22 was £10.687m following directly on
from a £10.291m savings package in 2020/21. This is very
significant and follows 10 years of substantial packages totalling
over £175m that have been necessary to enable cost and demand
increases to be funded alongside managing reductions in central
government grant funding of over £100m.
4.9
Appendix 4 provides a summary of savings in each directorate and
indicates in total what is anticipated/achieved or is at risk.
Appendix 5 summarises the position across all directorates and
presents the entire savings programme. The graph below provides a
summary of the position as at Month 5 and shows that £3.395m
(32%) is currently at risk. Of this £0.890m is in respect of
pressures relating to COVID-19. Mitigation of these risks will be
included in the development of services’ financial recovery
actions as far as possible.
5
Housing Revenue Account Performance (Appendix 4)
5.2
This year is more challenging for the HRA and the relatively small
overspend is mainly the result of the catching up on the backlog of
repairs from 2020/21 together with a reduction in rent income
caused by empty properties awaiting works. These costs are largely
offset by other underspends across the service resulting in a
relatively small forecast overspend of £0.978m. However, if
the HRA cannot manage this overspend through the year, this can be
met from HRA reserves.
6
Dedicated Schools Grant Performance (Appendix 4)
6.1
The Dedicated Schools Grant (DSG) is a ring-fenced grant within the
General Fund which can only be used to fund expenditure on the
schools budget. The schools budget includes elements for a range of
services provided on an authority-wide basis including Early Years
education provided by the Private, Voluntary and Independent (PVI)
sector, and the Individual Schools Budget (ISB) which is divided
into a budget share for each maintained school. The forecast
outturn is an overspend of £0.475m and more details are
provided in Appendix 4. Under the Schools Finance Regulations any
underspend or overspend must be carried forward to support the
schools budget in future years.
7
NHS Managed S75 Partnership Performance (Appendix 4)
7.1
The NHS Trust-managed Section 75 Services represent those services
for which local NHS Trusts act as the Host Provider under Section
75 Agreements. Services are managed by Sussex Partnership
Foundation Trust (SPFT) and include health and social care services
for Adult Mental Health and Memory and Cognitive Support
Services.
7.2
This partnership is subject to separate annual risk-sharing
arrangements and the monitoring of financial performance is the
responsibility of the respective host NHS Trust provider.
Risk-sharing arrangements result in financial implications for the
council where a partnership is underspent or overspent at year-end
and hence the performance of the partnership is included within the
forecast outturn for the Health & Adult Social Care
directorate. An underspend of £0.843m is currently forecast
and more details are provided in Appendix 4.
8
Capital Programme Performance and Changes
Forecast Variance Month 2
|
Directorate
|
Reported Budget Month 5
|
Forecast Outturn Month 5
|
Forecast Variance Month 5
|
Forecast Variance Month 5
|
£'000
|
|
£'000
|
£'000
|
£'000
|
%
|
0
|
Families, Children
& Learning
|
25,025
|
25,025
|
0
|
0.0%
|
0
|
Health & Adult
Social Care
|
755
|
803
|
48
|
6.4%
|
0
|
Economy, Environment
& Culture
|
90,043
|
90,043
|
0
|
0.0%
|
0
|
Housing,
Neighbourhoods & Communities
|
2,990
|
2,990
|
0
|
0.0%
|
(2,417)
|
Housing Revenue
Account
|
82,113
|
78,104
|
(4,009)
|
-4.9%
|
0
|
Finance &
Resources
|
2,953
|
2,953
|
0
|
0.0%
|
0
|
Strategy, Governance
& Law
|
600
|
602
|
2
|
0.3%
|
(2,417)
|
Total
Capital
|
204,478
|
200,519
|
(3,959)
|
-1.9%
|
(Note: Summary may include minor
rounding differences to Appendix 5)
8.2
Appendix 6 shows the changes to the capital budget and Appendix 7
provides details of new schemes for 2021/22 to be added to the
capital programme which are included in the budget figures above.
Policy & Resources Committee’s approval for these changes
is required under the council’s Financial Regulations. The
following table shows the movement in the capital budget since
approval at Budget Council.
Summary of Capital Budget
Movement
|
Reported Budget Month 5
|
|
£'000
|
Budget approved as
at TBM 2
|
205,585
|
Changes reported at
other committees and already approved
|
10,329
|
New schemes to be
approved in this report (see Appendix 5)
|
192
|
Variations to budget
(to be approved)
|
4,861
|
Reprofiling of
budget (to be approved)
|
(16,489)
|
Slippage (to be
approved)
|
0
|
Total
Capital
|
204,478
|
8.3
Appendix 6 also details any slippage into next year. However, as
normal, project managers have forecast that none of the capital
budget will slip into the next financial year at this early
stage.
9
Implications for the Medium Term Financial Strategy (MTFS)
9.1
The council’s MTFS sets out resource assumptions and
projections over a longer term. It is periodically updated
including a major annual update which is included in the annual
revenue budget report to Policy & Resources Committee and Full
Council. This section highlights any potential implications for the
current MTFS arising from in-year TBM monitoring above and details
any changes to financial risks together with any impact on
associated risk provisions, reserves and contingencies. Details of
Capital Receipts and Collection Fund performance are also given
below because of their potential impact on future resources.
Capital Receipts Performance
9.2
Capital receipts are used to support the capital programme. Any
changes to the level of receipts during the year will impact on
future years’ capital programmes and may impact on the level
of future investment for corporate funds and projects such as the
Strategic Investment Fund, Modernisation Fund, Asset Management
Fund and the Information, Technology and Digital Investment Fund.
The planned profile of capital receipts for 2021/22, as at Month 5,
is £11.400m which includes receipts expected from the land
transferring to the HRA for the Moulsecoomb housing redevelopment,
land disposals at the Cliff and Braypool Lane, disposal of
properties at the Old Steine and a number of lease extensions. To
date there have been receipts of £1.875m in relation to the
lease re-gear for commercial premises in Western Road in Brighton,
the disposal of land at Braypool Lane and some minor loan
repayments. The capital receipts performance will be monitored over
the coming months against capital commitments
9.3
The forecast for the ‘right to buy sales’ in 2021/22
(after allowable costs, repayment of housing debt and forecast
receipt to central government) is that an estimated 30 homes will
be sold and net retained receipt of up to £2.000m available
to re-invest in replacement homes. In addition to this net retained
receipt the HRA will also retain circa £0.520m to fund
investment in the HRA capital programme. To date 16 homes have been
sold in 2021/22.
Collection Fund Performance
9.4
The collection fund is a separate account for transactions in
relation to council tax and business rates. Any deficit or surplus
forecast on the collection fund relating to council tax is
distributed between the council, Sussex Police and Crime
Commissioner and East Sussex Fire Authority, whereas any forecast
deficit or surplus relating to business rates is shared between the
council, East Sussex Fire Authority and the government.
9.5
The council tax collection fund is forecast to be in deficit by
£0.869m of which £0.743m is from the deficit brought
forward from 2020/21. The impact of Covid-19 was built into the
current year’s estimate for council tax liability and
receipts although the ultimate impacts remain difficult to
forecast. The in-year deficit includes a continuing increase in SMI
exemptions £0.468m, increased numbers of single person
discounts £0.466m, higher than forecast awards of other
exemptions (includes patient, probate and students) £0.419m
and increases in other discounts totalling £0.070m (includes
disregards for students and SMI). Partially offsetting this is
lower than anticipated CTR awards £0.784m and increased
liability of £0.513m from a combination of banding changes
and properties completing earlier than anticipated in the forecast.
The council's share of the overall forecast council tax deficit is
£0.737m.
9.6
At this stage the business rates collection fund is forecasting a
small deficit of £0.358m for the council’s share
assuming that government will cover 75% of the brought forward
deficit and allowing for Section 31 compensation grants. There are
a range of risks that could change this forecast significantly with
the main uncertain factors being business failures and any step
increase in empty properties.
Reserves, Budget Transfers and
Commitments
9.7
The creation of reserves, the approval of budget transfers
(virements) of over £0.250m, and agreement to new financial
commitments of corporate financial significance that are not
provided for in the approved budget and policy framework require
Policy & Resources Committee approval in accordance with the
council’s Financial Regulations and Standard Financial
Procedures. There are no new reserves or budget transfers requiring
approval at this time.
10
ANALYSIS & CONSIDERATION OF ANY ALTERNATIVE OPTIONS
10.1
The provisional outturn position on the General Fund is an
overspend of £4.159m. This includes a forecast underspend of
£0.843m on the council’s share of the NHS managed
Section 75 services. However, it should be noted that the accuracy
of forecasts at this time remains challenging, particularly given
the very wide range of variables and factors driven by the ongoing
pandemic. The recovery of Parking Incomes will clearly be an area
to monitor closely alongside ongoing pressures on Homelessness
services.
10.2
The committee are advised that there are no set aside financial
risk provisions available to mitigate the position. However, the
council retains a £9m Working Balance which is its key risk
reserve.
11
COMMUNITY ENGAGEMENT & CONSULTATION
11.1
No specific consultation has been undertaken in relation to this
report.
12.1
The forecast risk at Month 5 represents 2.1% of the net General
Fund. This mid-year forecast indicates a number of demand and cost
pressures alongside income pressures, the majority of which are
driven by the ongoing pandemic. All directorates and services will
continue to do everything possible to mitigate the position as far
as they are able through the development of financial recovery
plans and actions. However, the level of spending on homelessness
and rough sleeping is a concern and needs close monitoring. While
Contain Outbreak Management Funds can be deployed to mitigate some
costs this year, unless the underlying demand is addressed or the
Spending Review provides additional funding, current spending
levels will substantially increase the estimated budget gap in
2022/23.
13
FINANCIAL AND OTHER IMPLICATIONS
Financial Implications:
13.1
The financial implications are covered in the main body of the
report. Financial performance is kept under review on a monthly
basis by the Executive Leadership Team and the management and
treatment of forecast risks is considered by the Audit &
Standards Committee as part of its review of strategic risks.
Finance Officer Consulted: Jeff
Coates
Date: 22nd June 2021
Legal Implications:
13.2
Decisions taken in relation to the capital and revenue budget must
enable the council to observe its legal duty to achieve best value
by securing continuous improvement in the way in which its
functions are exercised, having regard to a combination of economy,
efficiency and effectiveness. The council must also comply with its
general fiduciary duties to its Council Tax payers by acting with
financial prudence, and bear in mind the reserve powers of the
Secretary of State under the Local Government Act 1999 to limit
Council Tax & precepts.
Lawyer Consulted: Elizabeth
Culbert
Date: 22nd September 2021
Equalities Implications:
13.3
There are no direct equalities implications arising from this
report.
Sustainability Implications:
13.4
Although there are no direct sustainability implications arising
from this report, the council’s financial position is an
important aspect of its ability to meet council priorities. In
addition, the council’s response to managing the impact of
the pandemic, in lieu of further government funding announcements,
will be important to demonstrate that in a worst case scenario, it
has plans to manage the financial impact and avoid financial
collapse.
Risk and Opportunity Management Implications:
13.5
The council’s revenue budget and Medium Term Financial
Strategy contain risk provisions to accommodate emergency spending,
even out cash flow movements and/or meet exceptional items. The
council maintains a recommended minimum working balance of
£9.000m to mitigate these risks. The council also maintains
other general and earmarked reserves and contingencies to cover
specific project or contractual risks and commitments. However,
current reserves and balances were not set at a level to manage
financial shocks of the scale of the pandemic and any depletion of
reserves and balances to manage this position will normally require
a plan for replenishment in future years.
SUPPORTING DOCUMENTATION
Appendices:
1.
Financial Dashboard Summary
2.
Revenue Budget Movement Since Month 2
3.
Revenue Budget RAG Rating
4.
Revenue Budget Performance
5.
Summary of 2021/22 Savings Progress
6.
Capital Programme Performance
7.
New Capital Schemes
Documents in Members’ Rooms:
None.
Background
Documents
None.