Agenda item

Report of the Chief Operating Officer (Section 151 Officer)

The Cabinet considered a report of the Chief Operating Officer which outlined the final revenue and capital outturn position for 2021/22 and which reviewedtreasury management activity and 2021/22 Prudential Indicators reported under the Prudential Code for Capital Finance.

The report indicated that the 2021/22 financial year has once again been affected by a range of organisational and financial impacts resulting from the COVID-19 pandemic. These impacts were somewhat reduced compared with the previous year and were subsiding markedly by the year end. By any usual measure however, the impact of Covid still features significantly in this outturn report.

The Council has managed its response to the pandemic such that it has been able to stay within the resource allocation provided by Government. For the most part this reflects an approach to setting the 2021/22 Budget (in February 2021) when the Council budgeted for continued Covid impacts on its costs and income.

The overall financial position includes the following headline items:

·  A balanced revenue position.

·  Capital Programme expenditure of £189.5m

·  An increase in the level of available Council revenue reserves from £123m to £140m including Covid funding and the net underspend contribution.

Further detail in the includes:

·  A net underspend of £4.7m within central budgets including additional unbudgeted dividends and a surplus from the Coventry and Warwickshire Business Rates Pool.

·  A revenue underspend of £2.5m within Housing and Homelessness due in large part to the number of households living in temporary accommodation being lower than anticipated.

·  An overspend  of £4.3m within Streetscene and Regulatory Services including net costs of £2.2m resulting from the ongoing refuse drivers dispute.

·  An overspend of £2.4m within Children’s Services reflecting high numbers of children and high placement costs. 

·  Covid related costs within services estimated at £8.9m which have been funded from Government Covid resources and netted out from the outturn positions quoted.

·  A contribution of £1.2m to strengthen the Council’s reserve which protects against volatility within its commercial interests.

The underlying revenue position has improved by £2.5m since Quarter 3 when an overspend of £2.5m was forecast. In particular the improved position relates to improvements within Contingency and Central budgets and Housing and Transformation which are set out in the report. The position is an indication of the prudent management of the Council’s financial position through the Covid crisis although Covid has become far less prominent in recent months as a fundamental threat to the Council’s financial position. The cost of living crisis and growing levels of inflation have not had any clear impact on this financial outturn, reported up to 31^st March 2022 but these give strong cause to be cautious about the financial position of local government in the short-term. It is likely that these factors will present a stern test to the robust financial position that the Council has maintained in terms of its ability to continue to manage within its budgeted position and the extent to which it is able to fund any emergency policy responses.

As indicated above, the financial impact of Covid on the budgeted Outturn position has been estimated at £8.9m. This compares with a figure of £31m in 2020/21. As previously this is not a definitive figure because in many cases the Covid impact is difficult to disentangle from other trends. Government funding provided through 2021/22 funded all of this cost although this doesn’t take account of the loss in Business Rates and Council Tax income and other losses budgeted for by the Council when it set its budget in February 2021.

The Council will carry forward c£2.4m of general Covid grant provided by Government within 2021/22. If no further significant Covid outbreaks occur, the tactical approach will be for any further budgetary variations to be treated as ‘business as usual’ and managed within the Council’s bottom line.

The following adjustments to figures in the report were reported orally at the meeting:-

·  The revenue budget figure in paragraph 1.1 should be £243.8m (not £238.8m)

·  The figures in Table 3 are amended as follows:

-  The Private Finance Initiatives balance is £9.626m (not £9.904m)

-  The Usable Capital Receipts balance is £31.187m (not £37.158m)

-  The relevant sub-total and totals are amended to reflect these changes.

 It was noted that the report will be considered by Audit and Procurement Committee at their meeting on 25 July and that the report would be amended to reflect these adjustments.

RESOLVED that Cabinet approves:-

1)  The final balanced revenue outturn position.

2)  The final capital expenditure and resourcing position (section 2.3 and Appendix 2), incorporating expenditure of £189.5m against a final budget of £223.9m; £33.9m expenditure rescheduled into 2022/23 and a net underspend £0.5m.

3)  The outturn Prudential Indicators position in section 2.4.4 and Appendix 3.