Members considered a report proposing a revised budget in 2020/2021 to redress the impact of Covid-19 and ‘business as usual’ pressures and savings. Also included was a mid-year review of the Medium Term Financial Plan.
The Assistant Director of Finance, Business Support and Property Services introduced the report, and highlighted the following points:
· There had been significant movements in the Budget on income and expenditure due to Covid-19. There had also been a significant underspend in ‘business as usual’ activities. Therefore, officers had taken the view that it was prudent to propose a revised budget for 2020/2021.
In line with the proposed revised Budget, net revenue expenditure was forecast to increase from £14.457million to £19.479 million by the end of the financial year;
· £782,000 would be transferred to the General Fund Working Balance; the total balance in this fund for the year end was estimated at £4.6 million;
· A minimum working balance had been set at £2.5 million; that was to mitigate any in year Budget risks;
· Earmarked reserves had increased as there had been additional reliefs; the money in these reliefs was not being collected by the authority, but was being received in the form of a grant to mitigate cash loss. It would have to be repaid to the Collection Fund;
· A mid-year review of the Medium Term Financial Plan (MTFP) was undertaken as part of the Budget setting process, and it looked at the funding gap in the middle of the year. In 2021/2022, the authority was aiming for a zero-balanced Budget. There was a £1.3 million funding gap, growing to £1.5 million;
· There were a number of issues with meeting the funding gap, particularly around business rates. It was anticipated there would be a drop of £1.1 million from current forecasts. The Secretary of State had announced a 1 year settlement, whereas the authority was anticipating a three year settlement;
· One of the initiatives to meet the funding gap was the ‘Together 24’ programme, which contained a series of service reviews. This would be supported by capital investments in technology, the authority was hopeful of delivering savings by 2024;
· Next financial year would see a ‘vacancy factor’ added to the Budget. Every year on average there was a 4% turnover of staff. If a 2% vacancy factor was applied to the Budget, it would reduce expenditure;
· The £46,000 bequest in the recommendations was from a local resident, and was not ring-fenced for a specific person. It would be set aside and used for an appropriately deemed purpose.
The report was moved, seconded, and it was unanimously RESOLVED to:
(1) Approve the Revised Budget 2020/21 of £19.479m;
(2) Set aside £0.046m bequest for an appropriate agreed purpose;
(3) Transfer £0.782m to the General Fund Balance;
(4) Approve the transfer to the Collection Fund Reserve £2.703m for the expanded Retail, Hospitality and Leisure relief scheme to fund Collection Fund Deficit repayments
(5) Accept the latest forecast of the Medium Term Financial Plan and note the funding gap;
(6) Approve the assumptions to be used in preparing the Medium Term Financial Plan 2021/22.