Agenda item

Report of the Director of Finance

The Committee considered a report of the Director of Finance that detailed the forecast outturn position for revenue and capital expenditure and the Council’s treasury management activity as at the end of September 2020. The report was also due to be considered by Cabinet at their meeting on 1st December, 2020. Councillor Brown, Cabinet Member for Strategic Finance and Resources attended the meeting for the consideration of this item and spoke in support of the report.

The report indicated that the headline revenue forecast for 2020/21 was for net expenditure to be £36.3m (£28.2m at Quarter 1) over budget before the application of COVID-19 emergency funding for local government. After the use of this grant, the net over-spend was £3.5m (£6.7m at Quarter 1). At the same point in 2019/20 there was a projected balanced budget position.

The position included a very significant increase in forecast costs within Children’s Services. The overall forecast overspend in this area had risen by £5.3m over the quarter and now stood at £8.6m. An estimated £5.8m of this cost reflected higher looked after children numbers that had emerged following, and largely as a result of, conditions caused by the Covid pandemic. This level of activity represented a clear medium-term financial risk to the Council, and it was imperative that all appropriate interventions were identified to enable a sustainable financial position to be reached.

In other services and excluding the effects of Covid there were overspends in excess of £1m in each of Streetscene and Regulatory Services and Highways and Transportation.

The Council’s capital spending was projected to be £249.0m and included major scheme expenditure which ranged from investment in to the A46 Link Road, Coventry Station Masterplan, Whitley South infrastructure, Public Realm, Secondary Schools expansion and the National Battery Plant. The impact of Covid had been relatively modest in terms of delays to progressing capital schemes and the Council was on track to exceed the high levels of programme spend achieved in 2019/20.

The report set out an explanation of the major forecast variances with further details being included in an appendix. Information was also provided on the Covid funding allocations received from the government.

In relation to Treasury Management, the report set out the current position for interest rates; long term (capital) borrowing; short term (temporary) borrowing and investments; external investments; and prudential indicators and the prudential code.

The Committee raised a number of issues including details on the Council’s involvement in the A46 Link Road scheme; clarification about the Legal and Governance Services overspend; further details about the Legal Services agency costs; and the completion date of the St Mary’s Guildhall Capital scheme in the context of whether the facility would be available for the City of Culture 2021. Members also enquired about the Government compensation scheme for local authorities. 

RESOLVED that:

(1) Having considered and noted the proposals in the report, there are no recommendations for Cabinet.

(2) Cabinet and the Committee to be provided with clarification on the Legal and Governance Services overspend.

(3) Members be updated as regards to the Legal Services agency costs and the completion date of the St Mary’s Guildhall Capital Scheme. 

(4) The information on the A46 Link Road Project, circulated in March 2020,  to be sent to the Committee.