To receive the observations of the Overview
and Scrutiny Committee.
The Deputy Leader and Executive Member for Finance and Governance, Councillor Schofield, introduced the report by thanking Councillor Harrison and the Budget Scrutiny Panel for their hard work in considering the 2021/22 budget proposals, and officers for their contributions to the process.
Councillor Schofield explained that the Budget Scrutiny Panel had conducted a thorough review of the proposals. The report and recommendations of the Panel were considered by the Overview and Scrutiny Committee who made six recommendations for consideration by the Executive.
The Chairman of the Overview and Scrutiny Committee, Councillor Harrison, thanked members of the Executive and officers who attended the meeting of the Committee. The Committee had looked at revenue savings, additional income, forecasts, capital budget and reserves. The Committee considered that the proposals were achievable, realistic and based on sound financial practices and reasonable assumptions.
The Committee had also considered the impact that growth and savings were expected to have on service delivery. The impact was considered minimal and the Council is managing its finances well.
Councillor Harrison explained that the Committee was of the opinion that, in view of uncertainties around covid, the drawing of reserves of £0.5million was modest and reasonable. The Committee also noted the commercial strategy and that there were modest growths expected from the Council’s investments.
The Committee noted that there were a number of items still to be finalised in the revenue budget and capital projects, including the settlement from Government. For this reason, the Committee would review the overall budget at its meeting in January in order that it can give a final conclusion.
The Interim Head of Finance explained that the Government had just released the provisional settlement which set out the remaining parameters that the Council needed sight of in order to finalise the budget. The settlement confirmed the referendum limit for Council Tax, that there would be funding to help authorities meet covid-19 expenditure pressures in 2021/22 and that authorities would be able to submit a claim for covid-19 income loses in Quarter 1 of 2021/22. There were some technical adjustments in the provisional settlement which would need further consideration. Modelling would now be completed in order to present the final budget proposals in January.
The Leader of the Council, Councillor Brunt, expressed his thanks to the Chairman of the Overview and Scrutiny Committee for his work in scrutinising the budget proposals. The Leader also thanked the finance team for their hard work in documenting all costs and impacts relating to covid-19 and submitting claims on time and the Executive Member for Finance and Governance for his support in that work.
RESOLVED to note the following observations made by the Overview and Scrutiny Committee in response to the Service and Financial Planning 2021/22 report:
1. That the Overview and Scrutiny Committee thanks the Executive Member for Finance, Executive and Officers for preparing initial revenue and capital budget proposals for 2021/22
2. That the Overview and Scrutiny Committee considers the following to be achievable, realistic and based on sound financial practices and reasonable assumptions:
a) Revenue Budget Savings and Additional Income proposals totalling £2.094m.
b) Revenue Budget Growth proposals totalling £0.812m
c) Forecast ongoing income budget pressures in 2021/22 as a consequence of the COVID-19 pandemic totalling £1.610m (to be met by one-off funding from the Government Funding Risk Reserve)
d) Capital Programme Growth and Reprofiling proposals resulting in a net reduction in the five-year Capital Programme of (£0.286m)
e) Revenue Reserve Balances at 1 April 2020 of £35.391m
3. That the Overview and Scrutiny Committee considers the potential negative impact of the savings and growth proposals on service delivery to be minimal and concluded that the Council was managing its finances well on behalf of its residents.
4. That the budget proposals for 2020/21 included an allowance of £1.256m for the use of reserves including £1m to fund the headroom contingency budget, or a net increase of £256k excluding the headroom contingency budget. For 2021/22 no headroom budget has been established, and a drawing of £539k from reserves is planned. Any overspending will require further drawings from reserves.
5. That implementation of the Council’s Commercial Strategy is vital to meeting the budget gaps in future years, as government funding is further reduced. The Overview & Scrutiny Committee notes that no substantial additional commercial income from investments is included in the 2021/22 budgets.
6. That some capital budgets for investment are yet to be finalised, as well as a number of revenue budget items, and for this reason the Overview and Scrutiny Committee has yet to draw a conclusion on the overall budget proposals for 2021/22.