Agenda item

Report of the Corporate Director (Resources, Environment and Cultural Services) on the Revenue Outturn position for the financial year 2019/20.

(1)     The outturn for the General Fund and the Housing Revenue Account as at 31 March 2020 was noted.

(2)     The movements on earmarked reserves as detailed in paragraph 3.13 were approved.

(3)     The position on debts set out in section 5 of the report were noted.

Report of the Corporate Director (Resources, Environment and Cultural Services) on the Revenue Outturn position for the financial year 2019/20.

(1)       The Decision Taken

RESOLVED:

(1)  The outturn for the General Fund and the Housing Revenue Account as at 31 March 2020 was noted.

(2)  The movements on earmarked reserves as detailed in paragraph 3.13 were approved.

(3)  The position on debts set out in section 5 of the report were noted.

(2)       Reasons for the Decision

General Fund

Within the General Fund, Net Controllable Income and Expenditure amounted to £18.15 million, or £1.15 million below the Original Budget.

Significant favourable variances in Quarter 4 are set out in Section 3 of the report and included:

•      £276,000 of new burdens grants received in respect of benefit processing, where much of the cost was in fact absorbed within existing budgets.  Some of this is down to the timing of expenditure, so part of the favourable variance will be used to add to earmarked reserves to absorb expenditure in 2020/21.

•      £263,000 favourable on parking income following the ending of the CP Plus parking contract, as set out in 3.3.1.

•      £216,000 favourable on recycling and domestic waste income, as set out in 3.3.2.

•      £321,000 favourable on Housing and Communities, where additional expenditure on temporary accommodation has been more than matched by grants received.  Again, some of this is down to the timing of expenditure, so part of the variance has been added to earmarked reserves to absorb expenditure in 2020/21.

•      Against these positive variances, additional costs within Planning of £267,000 have arisen as a result of the Local Plan. 

Business Rates came in above budget by £860,000, largely as a result of the operation of the business rate “pool” to which we belonged. 

The Collection Fund deficit was absorbed by the earmarked reserve previously set up for this purpose, but it has been necessary to add to the remaining Earmarked Reserve to allow for the current year’s Collection Fund deficit and future business rate volatility.

The Council will continue to monitor the situation and manage the challenges through 2020/21.  But the Peer Review in late 2019 recognised the Council’s commitment to financial sustainability, and our financial performance in 2019/20 at least means the Council started the very difficult 2020/21 year in a strong position.

Housing Revenue Account

A balance of approximately £2.5M is maintained on the HRA, and any surplus after allowing for interest payments and debt principal repayments is re-invested in the Affordable Housing Programme.  Where necessary to maintain this capital programme at budgeted levels, additional HRA borrowing is undertaken to supplement this, with total borrowing being maintained comfortably within our “headroom”. 

Just as with the General Fund, the HRA will face challenges arising from the Covid pandemic in 2020/21.  For now, it is felt that the bad debt provision for rental income is adequate, but this is being kept under review.

The potentially significant 2020/21 Covid-related impact upon the HRA, identified in the paper referred to above, is the possibility of delays to our Affordable Housing Programme triggering the need to return £1.6M of Right to Buy receipts to the government.  Lobbying continues to extend the time period allowed to spend the receipts.

Debtors

This is a snapshot at 31 March, 2019, and so will not reflect the impact of any arrears caused by the Covid pandemic.  The situation is being monitored, but the Q1 2020/21 report is likely to show a sharply worsening position, as predicted in the recent Covid financial impact paper.

(Note:  *This item is part of Financial Outturn – General Fund, HRA and Capital (Forward Plan Reference FP984)).