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Agenda item

Financial Year 2020/21: Q2 Budget Monitoring

Report of the Chief Executive

 

Minutes:

Cllr Pauline Church, Cabinet Member for Finance, Procurement and Commercial Investment presented the report which (i) advised on the Budget Monitoring position 2020/21 Quarter 2 (30 September 2020) for revenue and capital for the financial year 2020/21 with suggested actions as appropriate; (ii) provided an update on the financial impact on the Council of responding to the COVID-19 pandemic and details on Government support; and (iii) provided an update on the Treasury Management performance for the year to date (30 September 2020).

 

Questions were received from Ian James about general reserves, Chippenham HIF finances and Stone Circle finances.

 

Cllr Whitehead acknowledged that the questions had received written responses which had been published on the Council’s website prior to the meeting. The were no requests for supplementary questions.

 

Cllr Church commented on the following matters:

·       The estimated financial impact to the Council of responding to the COVID-19 pandemic and the anticipated impact for the remainder of the 2020/21 financial year.

·       The Councils latest submission to the Government that sets out the forecast impact on the Councils finances.

·       Quarter 2 budget monitoring forecasts based on information as at 30 September 2020.

·       The receipt of £32m emergency funding from the Government.

·       The quarter 2 position forecasting an overspend of £20.467m, an improvement of £5.177m on the period 5 forecast overspend of £25.644m.

·       The forecast being reduced to an overspend of £0.467m as at quarter 2.

·       With improvements to the Councils financial position, rather than defer the collection fund deficit over three years, sufficient provision is put into the current financial year to deal with any losses now rather burden future financial years.

·       The underspends arising from the unallocated pay award budget and the tranche 4 emergency funding received from Government is transferred to a new earmarked reserve with the purpose of utilising the funds to equalise the budget in 2021/22.

·       Confirmation of the current forecast movement of approvals between years as schemes have been assessed and the spend profile recast.

·       An interim Treasury Management update based on information as at 30 September 2020.

 

Cllr Whitehead thanked officers for the incredibly long hours worked and resilience shown during the Covid-19 period. 

 

Cllr Graham Wright, Chair of the Wiltshire Covid-19 Response Task Group, explained that the Task Group at their meeting held on 28 October 2020 and the Financial Planning Task Group, at their meeting held on 27 October 2020, received updates on the Council’s financial position. Detailed discussions were held, with many questions raised and the Task Group’s were satisfied with the responses received.  

 

In response to questions from Cllr Ian Thorn about underspends in the budget for Learning Disabilities and Mental Health and overspends in the budget for Access & Reablement, Cllr Church and officers reported that challenges in staff recruitment and over recovery of income in relation to Section 117 funding had a positive impact on the budget for this service area.  In relation to Access and Reablement, it was noted that budget targets had been amended and the service area had been working hard to reduce the amount of overspend, which had been significantly reduced compared to the original forecast.

 

In response to a question from Cllr Hopkinson about spend on mental health issues and the hiring of agency staff, Cllr Church and officers offered to provide a full written response after the meeting.   

 

Resolved:

 

To note:

a)    the Section 151 officer’s summary of the impact of COVID-19 on the Council’s 2020/21 budget;

 

b)    the current revenue budget is forecast to overspend by £0.467m by the end of the financial year and forecast level of General Fund reserve;

 

c)    the current savings delivery performance for the year;

 

d)    the forecast level of reserves;

 

e)    the current capital budget movements and spend as at 30 September 2020

 

f)     the update report on Treasury Management Strategy 2020/21

 

 

To approve:

g)    the transfer to a new Budget Equalisation Reserve of the balance on the 2020-21 pay award budget and the tranche 4 emergency funding received from Government.

 

h)    the budget virements in the capital programme, as per Appendix B.

 

i)      a recommendation on to Full Council to approve the revised lending criteria, in that the Council uses the counterparty list provided by Link Asset Services, without any adjustment (Appendix D, paragraph 32 – 35).

 

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 forecast impact upon the financial position of the Council due to COVID-19 and of the Councils overall position on the 2020/21 revenue as at Quarter 2 (30 September 2020), including delivery of approved savings and highlighting any budget changes.

 

Supporting documents:

 

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