Report of the Director of Finance
The Cabinet considered a report of the Director of Finance, that would also be considered by the Audit and Procurement Committee on 26th July 2021 and by Council on 7th September 2021, that outlined the final revenue and capital outturn position for 2020/21 and reviewed treasury management activity and 2020/21 Prudential Indicators reported under the Prudential Code for Capital Finance. Appendices to the report provided: a detailed breakdown of Directorate Revenue Variations; Capital Programme Changes and Analysis of Rescheduling; and Prudential Indicators.
The 2020/21 financial year had been one like no other, with organisational and financial impacts exceeding anything experienced previously during peacetime. Some of these impacts were unseen in consideration of the Council’s outturn position – for instance Business Rates reliefs provided and business grants paid out through the year – but their scale had been staggering, nonetheless. The purpose of this report was not to catalogue the changes to society and Council services through the year, although where these had had a financial effect on the Council this would be outlined.
The overall financial position included the following headline items:
• A balanced revenue position after a recommended £9.2m was set aside in reserves to enable the city’s recovery from Covid, invested in the Council’s key priorities and strengthening the Council’s financial sustainability.
• Capital Programme expenditure of £194.2m which represented the second largest programme in the modern era.
• An increase in the level of available Council revenue reserves from £90m to £123m including Covid funding and the net underspend contribution.
Further detail included:
• A net underspend of £8.5m within central budgets after adjusting for the impact of Covid resulting overwhelmingly from one-off circumstances and the application of resources to fund previously approved decisions.
• A revenue underspend of £3.4m within Housing and Homelessness due in large part to the number of households living in temporary accommodation being lower than anticipated.
• Identified income loss and expenditure related to COVID-19 of £31m funded in-part by in-year Government emergency funding and sales fees and charges compensation grants provided for this purpose.
• A shortfall in this in-year Covid funding of £2.2m.
The underlying revenue position had improved by £8.7m since Quarter 3 when an underspend of £0.5m was forecast. In particular the overall underspend (before outturn reserve contributions) and the improved position related to improvements within Contingency and Central budgets which were set out in the report. In overall terms the favourable outturn position shown must be put in the context of the Covid-19 crisis. The position was an indication of the prudent management of the Council’s financial position but there were reasons to be cautious about the financial future of local government. These were explored more fully in the financial implications section of the report but could be seen in the uncertain future for local government finance nationally, the externalised and more volatile nature of some of the Council’s financial relationships and the continued and potential legacy impacts of Covid. On this ... view the full minutes text for item 9