Agenda item

2021/22 First Quarter Financial Monitoring Report (to June 2021)

Report of the Director of Finance

Minutes:

The Committee considered a report of the Director of Finance, which had also been considered by the Cabinet at their meeting on 31st August 2021, that advised the forecast outturn position for revenue and capital expenditure and the Council’s treasury management activity as at the end of June 2021.

 

The headline revenue forecast for 2021/22 was for net expenditure to be £14.3m over budget before the application of COVID-19 emergency funding for local government. After the use of this grant, the net over-spend was £4.0m. At the same point in 2020/21 there was a projected overspend of £6.7m.

 

The position included an underlying overspend of £6.5m within Children’s Services although £3.8m of this has been attributed to the pandemic and funded from one-off Covid funding accordingly, leaving a net overspend of £2.7m. In order to anticipate the likely future budgetary position within Children’s Services it would be necessary to understand more fully the extent to which these pressures would continue beyond the period when Covid was a significant contributory factor. Looking ahead to next year, it would be a key focus of management to identify the causes and to reduce the budget pressures within Children’s Services as a fundamental element of balancing the 2022/23 Budget position.

 

Elsewhere, budget pressures had emerged within Streetscene and Regulatory Services, Legal and Governance Services and Finance although the overall corporate position was within acceptable tolerances at this stage of the financial cycle.

 

The Council and the city continued to receive Government support linked to Covid within the 2021/22 financial year. This amounted to c£19m announced to date to support Council services directly and a further c£45m channelled through the Council to support Coventry businesses and external suppliers. Although further allocations could not be ruled out, the pace of funding announcements had slowed markedly reflecting the wider easing of lockdown measures. The scale of any residual Covid related grants was therefore likely to be modest.

 

The Council’s capital spending was projected to be £247.1m and included major scheme expenditure which ranged from investment in to the A46 Link Road, Coventry Station Masterplan, Friargate Building 2 and the Hotel, Air Quality and Secondary Schools expansion. The size of the programme and the nature of the projects within it, continued to be fundamental to the Council’s role within the city.

 

The Council’s services and its financial position were moving gradually towards a business as usual position as the year progressed with activity and impacts arising from the Covid pandemic starting to subside. Some pockets of service activity continued to be significantly affected although often this was not resulting in a net financial cost. It was clear though that significant financial risk remained in relation to the underlying funding position for local government as well as the future trajectory of Covid costs and funding within a few service areas. It remained a financial imperative therefore to focus on the medium-term horizon and for the Council to tackle the anticipated legacy effects of Covid.

 

Appendices to the report provided details of: the Revenue Position: Detailed Directorate Breakdown of Forecast Outturn Position; the Capital Programme: Analysis of Budget/Technical Changes; the Capital Programme: Estimated Outturn 2021/22; the Capital Programme: Analysis of Rescheduling; and Prudential Indicators.

 

In considering the report, the Committee requested that comparison information be provided in relation to the waste and fleet services to see if other authorities were having difficulties with waste collections.

 

RESOLVED that the content of the report be noted.

Supporting documents: