Members received and considered the report of the Finance Manager on the Revenue Budget and Capital Programme Monitoring Quarter 3 2020/21.  The report updated Members on the Council’s finances as at the end of December 2020 and projected a provisional outturn for 2020/21.

Since the Quarter 2 Monitoring Report, there had been two reportable virement regarding a transfer of the property valuation contract budget from Acquisitions, Transformation and Regeneration to Resources and an £18,000 saving in additional staff hours within the Resources department.

At the end of Quarter 3, the Council was predicted to incur a deficit of £2.594m of which £1.677m was unplanned.  This represented an improvement of £193,000.  The costs of services showed a deficit of £3.696m and non-service budgets increased the forecast overspend to £4.041m.  This was reduced by £2.363m mainly due to additional grant income from the Ministry of Housing, Communities and Local Government (MHCLG).

All forecasts included inherent risks, and these were exacerbated by the level of uncertainty surrounding the pandemic.  Quarter 2 report estimated the cost of the Council’s pandemic response to be approximately £1.109m after the additional funding from the MHCLG.  Quarter 3 forecast showed a net reduction of £197,000 to £912,000.

Overall, the deficit on the cost of services was attributed to various overspends/deficits including staff restructuring, consultancy advice, grants, increased planning fees and land charges income, increased Community Infrastructure Levy funding, salaries, increased garden waste income, supporting leisure services, housing benefit overpayments and other minor variances.

Interest income from investments was expected to be below budget (an improvement of £38,000 on the previous forecast).  The pandemic had slowed progress on several capital schemes which would reduce the borrowing requirement in 2020/21.  As a result, the interest payments forecast had reduced by a further £68,000 and the amount of revenue funding for capital projects by £628,000.

The Council had received £170,000 from MHCLG to assist with administration costs during the pandemic; in total £2,567,000 had been received.  The reimbursement from the MHCLG for the loss of income from sales, fees and charges was anticipated to increase by £25,000 which was attributed to the reduction in car parking income.

The net impact on Reserves was forecast to be a reduction of £3.805m against the planned figure of £2.276m; an improvement of £821,000 on the previous quarter.

The Council Tax part of the Collection Fund (CF) was currently 2.50% lower than the same point last year and Business Rates was 1.85% lower. These represented a significant improvement of 2.74% from the Quarter 2 forecast.  Based on the current collection rates, it was expected that the CF would be in deficit by the end of the financial year.  Cabinet was advised that the Government was allowing councils to spread deficits over a 3-year period, so impact on the Council’s financial position in 2020/21 would be limited.

A summary of spend by capital project for 2020/21, financing sources and overall five-year programme was shown at Appendices A and B to the report.

In December 2020, the Council had made a joint application to Sport England’s (SE) National Leisure Relief Funding with Freedom Leisure (FL) to support the operator through December 2020 to 31 March 2021.  The outcome of the application was still awaited and if successful, funding would be received before 31 March 2021 and an open book basis would be applied and a grant agreement required with FL.

Should the SE funding be approved, Cabinet agreed that the Council entered a grant agreement with FL to ensure compliance with any conditions to ensure that costs not properly incurred were recovered.

RESOLVED:  That:

1)    the report be noted;

2)    subject to Sport England approval, the Council accept the grant from Sport England and pass the funding to Freedom Leisure and enter into an agreement with Freedom Leisure to ensure compliance with Sport England grant conditions to ensure that costs not property incurred were recovered.