Agenda item

Report of the Executive Director (Finance and Transformation) on the revenue outturn position for the financial year 2021/22, outlining the main variances from the original budget for both the General Fund and Housing Revenue Account.

(1)   Cabinet noted the revenue outturn position for 2021/22.

(2)   Cabinet approved the movements on earmarked reserves as detailed in section 3.4 of the report.

(3)   That delegated authority be given to the Section 151 Officer to adjust the 2022/23 budget for items of income and expenditure rolled forward through earmarked reserves.

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

Report of the Executive Director (Finance and Transformation) on the revenue outturn position for the financial year 2021/22, outlining the main variances from the original budget for both the General Fund and Housing Revenue Account.

There was a positive outturn in light of the ongoing pressures of the pandemic, with a net surplus on the general fund of £74k.  It was proposed to move to the modernisation reserve to support future transformation projects.

In terms of covid impacts, the net impact was just over £4M. Of this, £2.8M related to business support grants, for which the Council received government grant income for in 2020/21 and set the grants aside in earmarked reserves, so this was fully funded.

The covid reserve of just over £1M, along with sales fees and charges government support in the first quarter of £330k, they covered the income losses such as Campus West and net car parking losses.

Other costs such as additional resources in council tax for support grant and track and trace payments, and environmental health covid officers had all been funded by specific or new burdens grants.  There were some other variances, such as a favourable variance on summons costs where the Council had a backlog of court summons along with net losses on business centres where units had been vacant and the Council had to pick up business rates and property costs for the centre in addition to the lost income.

In terms of non covid variances, there were a number of grants and contributions received which were not fully utilised, such as homelessness funding, and these had been set aside into the grants and contributions earmarked reserves. There were a number of underspends on salaries due to vacancies which partly offset some of the adverse variances.

Some of the key adverse variances to highlight were:

•   Utilities - £474k overspend – this was greater than original assumptions for 2022/23 budget as costs had been continuing to rise at a significant rate.

•   GLL – There was concern around whether they would continue to be able to deliver original savings at the rate expected, and this was bourne out in the adverse variance this year. Officers will be meeting with GLL to discuss this.

•   Garages income was behind by about £80k and it will take time to get occupancy levels up to where they need to be to meet budgeted income.

•   Campus West – It was unclear whether they will get back to previous trading levels which would affect income generation.

There have also been non service variances, including additional income for investments which were linked to capital slippage and rising rates, along with savings on borrowing costs, giving a net £350k saving. The bad debts provision had increased by £175k, which was directly linked to an increase in debts over 90 days. Should these debts be recovered, this would be released back to revenue in future years.

In terms of Housing Revenue Account, the largest variance was in relation to repairs and maintenance, of just over £3M, which was due to the backlog of repairs associated with the pandemic, and increasing material prices. There were favourable variances which offset some of this overspend, and the remaining £1.85M overspend had been funded by a reduced revenue contribution to capital.

In terms of debts, there had been a continual reduction to debtor days which was positive as it meant debtors were paying faster than before. A large proportion of the commercial tenants were on payment plans and were sticking to them.   The Council continue to manage debtors closely, and, where applicable, the Council were encouraging tenants to agree payment plans.

Considerable uncertainties remain such as inflation and cost of living implications, and these will persist into the current financial year.  But the Council can be pleased that, for financial year 2021/22, thanks to proactive financial management, previously accumulated reserves, and government support, the Council have weathered the storm without having to cut frontline services.

RESOLVED:

(unanimous)

(1)   Cabinet noted the revenue outturn position for 2021/22.

(2)   Cabinet approved the movements on earmarked reserves as detailed in section 3.4 of the report.

(3)   That delegated authority be given to the Section 151 Officer to adjust the 2022/23 budget for items of income and expenditure rolled forward through earmarked reserves.

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