Report of the Deputy Chief Executive and City Treasurer attached

The Executive considered a report of the Deputy Chief Executive and City Treasurer, which outlined  the projected outturn position for 2021/22, based on expenditure and income activity as at the end of December 2021 and future projections.

The Leader advised that the current budget monitoring forecast was estimating an underspend of £1.170m for 2021/22, based on activity to date and projected trends in income and expenditure, and includes the financial implications of COVID 19, government funding confirmed to date and other changes.

In relation to the delivery of the £40.717m of savings identified as part of the budget process the majority were on track for delivery. However, £2.482m (6%) of these were considered high risk and were unlikely to be delivered in this financial year and a further £5.287m (13%) were medium risk, in terms of the likelihood of delivery. Officers were working to ensure all savings are achieved or mitigated.

The report set out the following virements that had been applied in relation to COVID 19 and other virements between directorates as well as COVID 19 related grants received:-

COVID 19 related virements:-

·                £131k virement from Coroners;

·                £200k from Homelessness; and

·                £350k virement from HR/OD.

These adjustments brought the 2021/22 transfer to smoothing reserve to £10.590m.

Other virements between directorates included:-

·                £2.124m ICT budget centralisation to enable better analysis over the whole spend on IT Hardware, Phones and Printing

COVID 19 related Grants (where the Council was acting as principal and were added to Directorate budgets):-

·                £1.805m – Workforce recruitment and retention fund;

·                £666k – COVID Adult Social Care Omicron Support Fund;

·                £185k – Community Vaccine champions programme;

·                £0.729m – Protect and vaccinate;

·                £0.689m – Homeless prevention grant top up; and

·                £0.999m – Additional Restriction Grant Omicron (ARGO).

COVID 19 related Grants (where the Council was principal for the discretionary element of the funding and as agent for the remainder):-

·                Test and Trace Support Payments (October - December), for adults who were self-isolating. £254k added to Directorate budgets, and £169k treated as agency as the council was acting on behalf of government and has no discretion over the use of funds.

·                New Burdens 4 restart and ARG grant schemes, £85k added to the directorate budgets and £97k treated as agency to help meet the costs of delivering the Restart Grant Scheme and the ARG Top Ups from 14 October 2020 to the end of March 22.

COVID 19 related Grants (where the Council was agent for the fund):-

·                £6.090m – Business Support - Omicron Hospitality and Leisure grant;

·                £23.993m – COVID Additional Relief Fund (CARF); and

·                £91.515m – Section 31 extended retail relief.

Since the Period 6 Revenue Monitoring report there had been additional non

COVID-19 grant notifications which are now reflected in the revised budget as

Follows:-

·                £1.456m – Afghanistan Resettlement Education Grant;

·                £3.870m. – Holiday activities and food programme 2022; and

·                £200k – delivery of the  Serious Violence Action Plan

Approval was also sought on the following allocations from corporate budgets:-

·                Home to school transport - £120k to address the implications of the increases in fuel costs are now starting to impact on the provision of the Home to School Transport service;

·                Unitary Charge Inflation – Street Lighting, £59k to address higher inflation (RPIX), lower interest earned on reserves and increased spend to save recharges than were assumed in the original model; and

·                Biffa pay award, £556k to cover the estimated pay award, increase to the contract price and retention of HGV drivers

Taking into account the forecast financial implications of COVID 19, confirmed and anticipated government funding and any other known budget changes the budget forecast was an underspend of £1.170m for 2021/22. There remained significant uncertainties and risks to the position as COVID 19 restrictions eased, these were being monitored closely.

Whilst the position for 2021/22 and 2022/23 looked manageable, the financial position from 2023/24 was much more challenging. The Medium-Term Financial Strategy elsewhere on the agenda set out the financial context for ensuring future financial sustainability.

Decisions

The Executive:-

(1)     Note the forecast outturn position which is showing a £1.170m underspend.

(2)     Approve the proposed revenue budget virements (set out in paragraphs. 2.4            to 2.8)

(3)     Approve additional COVID 19 grants to be reflected in the budget (set out in paragraphs 2.9 to 2.14)

(4)     Approve the use of other unbudgeted external grant funding (non COVID 19)          (set out in paragraph. 2.15).

(5)     Approve the allocation of budgets from corporate inflation (set out in paragraph 2.16)