Agenda item

The Executive Director Core Services and Service Director Finance (Section 151 Officer) will submit a joint report on the financial performance of the Authority during the first quarter ended 30^th June, 2020 and assessing the implications against the Council’s Medium Term Financial Strategy.

The Executive Director Core Services and Service Director Finance (Section 151 officer) submitted a joint report on the financial performance of the Authority during the first quarter ended 30^th June, 2020 and assessing the implications against the Council’s Medium Term Financial Strategy.  The report had been considered by the Cabinet at its meeting on the 9^th September, 2020.

It was noted that the report was the first update presented which reflected the impact of Covid 19 on the Council’s financial position.  The pandemic had placed a significant strain on the 2020/21 revenue budget and the Council was reporting an overall projected General Fund revenue overspend of £33.5m for the year.  This comprised a forecast overspend on Directorate budgets of £26m and a £7.5m overspend on Corporate budgets.  In addition there was projected overspend of £4.8m on the Housing Revenue Account.  There was an overall net impact after Government funding of £15.7m.

The position on the Council’s Capital Programme for 2020/21 was currently projected to be an overall lower than anticipated expenditure of £13.4m.  This, in the main, related to scheme slippage of £9.2m thought there had also been a reduction in scheme costs totalling £4.4m all relating to schemes with restricted (specific) funding.

As part of the 2020/21 budget setting process some £10.4m or new capital investment had been provisionally approved, however, due to the Covid pandemic this new investment had been suspended pending a review in line with the Covid 19 Financial Recovery Strategy.  This review had now been completed with £7.275m of this investment now able to proceed.

In relation to Treasury Management issues, there had been a downward trend in Public Woks Loan Board (PWLB) borrowing rates over the first quarter with the expectation of little upward movement in interest rates over the next two years and subject to ongoing Government consultation some PWLB borrowing rates could be reduced by up to 1%.

There had been no new borrowing within the quarter and due to the benign interest rate environment, it was not anticipated that any material borrowing would take place during the remainder of the financial year.  It was anticipated that the Council would need to borrow up to £225m over the next three years of which £75m would need to be taken at fixed interest rates to maintain interest rate risk exposure at 70% of total debt.

Security and liquidity remained the key investment priorities with the majority of new investments placed in secure Money Market Funds and instant access accounts.

Reference was made to the £1.498m extra costs within the Adult Social Care Service.  It was noted that this was not solely to be used in relation to anti-social behaviour but would be utilised to provide:

·         Financial Hardship Support

·         Emergency accommodation for the homeless and rough sleepers

·         Provision of an emergency contact centre

·         Food distribution

·         Support for the voluntary sector.

It was acknowledged that this was perhaps unclear and the wording would be amended accordingly.

RESOLVED that the report on the financial performance of the Authority for the first quarter ended 30^th June, 2020 be noted.