Agenda item

Agenda item

Revenue Budget Monitoring 2020/21

The report of the Deputy Chief Executive and City Treasurer is enclosed.

Minutes:

The Deputy Chief Executive and City Treasurer presented a review of the 2020/21 revenue budgets. The report provided an overview of the Council’s financial position as at the end of May 2020 and the work underway to develop a balanced budget for 2020/21. The report identified a projected deficit for 2020/21 of £5.476m. That was based on the financial implications of COVID-19, government funding confirmed to date, other identified budget changes, in year efficiencies and mitigations. The anticipated financial cost of the COVID-19 pandemic to the Council so far was £166.26m. It was anticipated the deficit could be met through the Council’s share of the third tranche of emergency funding for income loss that had yet to be allocated by the Government. The report also anticipated that the consequences of the COVID-19 pandemic were expected to have a significant impact on the council’s finances for a number of years. With the likely scale of funding pressures and future resource reductions, the report stressed that it would be important for the Council to hold a robust position on reserves, and to maintain the ability to deal with issues that might arise during the financial year. The overall revenue forecast for 2020/21 was:

 

2020/21 Budget Position as at May 2020

Original Approved Budget

£000

Revised Budget

£000

Forecast Outturn

£000

Total P2 Forecast Variance

£000

Total Available Resources

(666,125)

(821,252)

(806,419)

14,833

Total Corporate Budgets

126,761

264,855

264,479

(377)

Children's Services

130,320

130,485

137,164

6,679

Adult Social Care

221,253

229,213

237,578

8,365

Homelessness

15,285

15,306

22,450

7,144

Corporate Core

69,958

76,918

80,136

3,218

Neighbourhoods

93,802

94,306

102,802

8,496

Growth and Development

8,746

10,169

15,701

5,532

Total Directorate Budgets

539,364

556,397

595,831

39,434

Total Use of Resources

666,201

821,252

860,310

39,058

Total forecast over / (under) spend

0

0

53,891

53,891

COVID-19 Government grant income (tranche 1 and 2) -Confirmed

 

 

 

(33,367)

Proposed Corporate measures

 

 

 

(7,963)

Sub-Total Pre July Funding Announcement

 

 

 

12,561

COVID-19 Government grant income (tranche 3)

 

 

 

(7,085)

Net forecast over / (under) spend

 

 

 

5,476

 

 

And the means of addressing the impacts of COVID-19 in the current year were:

 

2020/21

£000

COVID-19 Budget impact of Additional Costs and Net income losses

64,456

P2 - Savings, mitigations and other changes

(10,565)

COVID - Budget shortfall after in year measures

53,891

COVID 19 Emergency Funding Tranches 1 and 2 (Note £389k applied in 2019/20)

(33,367)

Corporate measures identified

(7,963)

Original budget shortfall

 

COVID - Budget shortfall after in year measures

12,561

Forecast COVID 19 Emergency Funding Tranche 3 (Confirmed to date)

(7,085)

Budget shortfall after confirmed funding and mitigations

5,476

 

However, the projected budget deficit for 2021/22 was much greater, £162.5m.

 

Should further tranche 3 funding be awarded it was proposed and agreed that authority to allocate that funding to services should be delegated to the Deputy Chief Executive and City Treasurer.

 

The report explained that the Council had been awarded £225k of the Local Authority Business Rates Grant Administration (New Burdens) funding. It was proposed and agreed that this is included in the Revenue and Benefits budget to contribute towards the costs of administering both the Small Business Grant Fund and Retail, Hospitality and Leisure Grant Fund schemes to provide support to businesses across the city.

 

The report included an appendix giving a more detailed breakdown of the current year’s finances. Within that were a number of proposals that required authorisation.

 

Budgets to be allocated

 

When setting the 2020/21 budget the Council has agreed to hold some funds for contingencies, and other money that was to be allocated throughout the year. The report proposed the use of some of these budgets to be allocated. These were agreed:

·         £364,000 allocated to in-house foster care as a 2% inflation uplift to be applied as at 1 April 2020.

·         £200,000 allocated to care provision as an inflationary uplift for residential care providers

·         £805,000 allocated for the waste collection and disposal contract inflation increase

·         £91,000 allocated for the annual inflationary increases on the Street Lighting PFI unitary charge

 

Use of an External Grant

 

The report also explained that notification had been received in relation to a specific external grant, the use of which had not confirmed as part of the 2019/20 budget setting process. Approval was given to the use of £15,000 of ‘pocket parks’ funding to improve accessibility of Fletcher Moss park and help support social subscribing for those with mild depression, social isolation or health problems.

 

Budget Virements

 

The report proposed two funding virements which were both agreed.

·         allocation £300K in each of 2020/21 and 201/22 from Neighbourhood Services to Communications in the Corporate Core

·         allocation £600 of uncommitted inflation funding to Adult Social Care Services in 2020/21

 

Use of a Reserve

 

The report also addressed the use of the Council’s reserves. Three new draw-downs from the Adult Social Care reserve had been requested, totalling £1m. Those were approved, being: £550k to support the demand from increased placement costs within the Learning Disability Service, a further £300k to support the immediate implementation of a Brokerage function to embed new commissioning arrangements resulting from the implementation of the Liquidlogic IT system; and a further £150k due to the demand diagnostics work which will support the future funding work for Adult Social Care in 2021/22.

 

Decisions

 

1.         Note the global revenue monitoring report and a forecast outturn position of a £5.476m deficit, which it is anticipated will be balanced by government funding.

 

2.         Approve the use of budgets to be allocated as set out above.

 

3.         Approve the use of grants in addition to that already planned, as set out above.

 

4.         Approve the proposed virements set out above

 

5.         To approve an increase in Growth and Development Directorate budget of £0.957m for the Local Welfare Assistance Fund.

 

6.         To approve an increase in the Corporate Core Directorate budget of £225k for New Burdens funding in respect of the costs associated with administering the business rates grants schemes (Small Businesses Grant Fund and Retail, Hospitality and Leisure Grant Fund).

 

7.         To delegate to the Deputy Chief Executive and City Treasurer the allocation of the COVID-19 tranche 3 grant funding to individual services, in consultation with the Executive Member for Finance and Human Resources.

 

8.         To approve, under the emergency provision of the Council Decisions on 25 March 2020 - “Constitutional Amendments and Other Matters for Council Business Continuity - Part 7”, the use of £1m of reserves as set out above.

 

 

Supporting documents: