Agenda item

Report of the Chief Executive.

Cllr Richard Clewer, Leader of the Council and Cabinet Member for Climate Change, MCI, Economic Development, Heritage, Arts, Tourism and Health & Wellbeing presented a report which provided detail about the final year end position for the financial year 2021/22 for the revenue programme.

The Cabinet noted that the report provided details of variances against budgets following the quarter three budget monitoring reported to Cabinet on 1 February 2022. That report forecast an underspend of £14.824m for the financial year and detailed how this would be utilised. The final position for the year has again improved during the last quarter and requests are made to transfer £4.098m, of which some relate to government grants, into specific earmarked reserves to support planned activity in 2022/23 and future years. The final year end position, after taking into account those reserve movements, shows an
underspend of £11.483m.

Cabinet noted that the improved position allowed for additional transfers to the General Fund reserve, mitigate the pressure of unforeseen rise in inflation, and the Councils Business Plan priority reserve.

Cllr Pip Ridout, Chair of the Financial Planning Task Group, confirmed that the report had been considered by the Task Group at its meeting on 8 July 2022. The Task Group confirmed that reserves were at a sufficient level and there were no specific concerns raised at the meeting.

Cllr Ian Thorn congratulated officers for achieving the underspends. He raised a concern about the challenges being faced by food banks and other charitable services, although he welcomed the support from government. In addition, Cllr Thorn highlighted the expectation of latent demand. In response, the Leader explained that cost of living crisis had only just started in relation to the timescales of the report. The challenges to food banks and other charities were understood and there may be a need for additional support if the cost of living crisis continues.  Officers highlighted the role of the Council and its partners in responding to the challenges of adult social care and it was noted that latent demand may not be experienced at this stage, although it was anticipated. The Deputy Leader explained that the number of referrals for Children’s Services was lower than expected however, each referral was more complex.  

Cllr Jon Hubbard commented on (i) the underspends achieved in Education and Skills and questioned whether the underspends could be allocated to support the deficits in the High Needs Block element of the Dedicated Schools Grant  or reinvested, (ii) a reduction in the number of children in care and associated savings, (iii) bed blocking and (iv) support for people going home from a stay in hospital and use of ‘flying carers’. In response, the Leader, Deputy Leader and officers confirmed that the Council were unable to use general fund underspends on the deficits in the Dedicated Schools grant due to current legislation, underspends in Education and Skills were in the main a consequence of Covid-19 and the inability to recruit to vacancies, recruitment was now underway, and underspends were being reinvested in the service, the plans in place for children and young people with social care needs were achieving underspends, there were huge challenges in domiciliary care, services were very focussed to meet needs and avoid bed blocking along with much positive joined up working taking place.

Cllr Gavin Grant asked for clarity in relation to an overspend on Government grants of £0.568m, the reasons why Business Grants of £16.359m were returned to the Government, underspends on staffing and issues relating to recruitment, and the implications of the general fund reserve reaching its target in advance of original estimates. In response, the Leader and officers explained that the grant received from Government was less than expected, although this was corrected going forward, the query in relation to the grant returned to Government would receive a written response, confirmation was received that there were challenges in recruiting to vacancies, however, the intention is to continue to recruit and consider any changes in recruitment practice in light of the current climate. .   It was also confirmed that the proposal to increase the general fund reserve now was prudent and placed the Council in a stronger position with respect to financial resilience.  The annual assessment of risk that gives rise to the S.151 officers recommended balance on the general fund reserve would be undertaken as part of the annual budget setting cycle.     

Resolved:

(1)  Cabinet noted:

a)    the revenue budget outturn position for the financial year 2021/22;

b)    the contributions to and from earmarked reserves as planned;

(2)  Cabinet approved:

c)    the transfer of £12.824m to the Budget Equalisation reserve as set out in the Quarter 3 budget monitoring report;

d)    the transfer in total of £4.098m to earmarked reserves as detailed in the report and Appendix B;

e)    the transfer of the balance of the £11.483m underspend as follows:

i.               £2.8m to be transferred to the General Fund reserve;

ii.             £7m to be set aside and transferred to a new Inflation reserve for 2022/23;

iii.            the balance of £1.683m to the Business Plan Priority reserve.

f)     Authorise the commitment of funds from the Business Plan Priority Reserve to fund the following over the next 3 years:

· £1m on gully emptying.

· £0.450m on Fly Tipping enforcement

Reason for Decision:

To inform effective decision making and ensure sound financial management as part of the Councils overall control environment.

To inform Cabinet on the final financial year end revenue outturn position for the Council for the financial year 2021/22, including delivery of approved savings.

To improve the Councils financial resilience by increasing the balance on the General Fund reserve now and setting aside funds in earmarked reserves to prudently assist in managing the Councils future pressures and budget gap