Issue - meetings

Report of the Chief Executive on the forecast revenue outturn position as at 31 December 2020 (Quarter 3) for the financial year 2020-21.

(1)     Cabinet noted the revenue forecast outturn position as at Quarter 3.

(2)     Cabinet noted the position on debts set out in section 5 of this report.

Report of the Chief Executive on the forecast revenue outturn position as at 31 December 2020 (Quarter 3) for the financial year 2020-21.

As noted in the report, there is an adverse variance on the General Fund net cost of services of £3.24M, a slight overall improvement on the situation 3 months ago.

The adverse variance to the original budget is, as before, explained by the impact of Covid. 

As noted in the report, Covid impacts amount to £3.97M.  Foremost amongst these are the loss of Campus West income of £1.1M, loss of parking income of £722k, loss of commercial rental income of £450k, additional support payments to GLL of £380k, and the additional cost of supporting the homeless of £430k.

At the net cost of services level, the adverse Covid impact has been partly offset by favourable variances of £730k, spread across various services.

Fortunately, we have received government support to significantly offset the Covid impacts, and the level of support for 2020/21 has now risen to £2.9M, an increase of £800k since the second quarter.

This increase in the level of government support, together with other positive variances, means that it is now felt unnecessary to use all of the £405k Earmarked reserve initially set aside to offset the impact of Covid.  Accordingly, £128k of this Earmarked Reserve will be held back and carried forward to 2021/22 to bolster the £610k to be provided for in the 2021/22 budget.

This is certain to be needed in 2021/22, as the level of government support for next year, beyond the £610k already announced, is uncertain. Furthermore, it is very likely that loss of commercial rental income will carry on into 2021/22, and this element is not covered by government support.

As noted in the report, debtors continue to rise.  The most difficult area here is, unsurprisingly, the difficulties that a number of our commercial tenants face as a result of Covid restrictions.  We have estimated a loss of £450k of commercial rental income, and this still looks reasonable for 2020/21.  This problem will almost certainly persist into 2021/22.   We continue to manage debtors closely, and, where applicable, we are encouraging tenants to agree payment plans with us.   

There are no substantial variances in the HRA, as rent collection continues to hold up.  The announcement that Right to Buy receipts can be held onto for somewhat longer has relieved some of the previously estimated Covid related pressure on the HRA, and the latest projection indicates that there is no imminent need to remit such receipts to the government.

Considerable Covid related uncertainties remain, and these will persist into the next financial year.  But the Council can be pleased that, for the current financial year, thanks to proactive financial management, previously accumulated reserves, and government support, we have not had to cut frontline services.

RESOLVED:

(1)     Cabinet noted the revenue forecast outturn position as at Quarter 3.

(2)     Cabinet noted the position on debts set out in section 5 of  ...  view the full minutes text for item 222