Members received and considered the report of the Finance Manager on the Draft Revenue Budget and Capital Programme Outturn 2020/21, which had been referred to the Overview and Scrutiny Committee for Members’ information and for any recommended actions to Cabinet as necessary. This report updated Members on the Council’s finances as at the end of March 2021 and included a draft outturn for 2020/21. Members were advised that this could change as a result of the external audit of the Council’s financial accounts due to take place in August 2021.

The Council incurred a deficit of £1.284m, of which £367,000 was unplanned in 2020/21, which was an improvement of £1.310m on the Quarter 3 forecast. The Cost of Services showed a deficit of £2.441m, which reduced to £2.050m after changes in non-service budgets.  This reduced further to £367,000 mainly due to additional grant income from the Ministry of Housing, Communities and Local Government (MHCLG).

The main reasons for the variations as detailed in the report included the reduction in the net cost of the Council’s pandemic response, a £50,000 grant to the Sussex Wildlife Trust, £50,000 decrease of the outturn on commercially let properties and a decrease in the net costs of Housing Benefits.

The council tax collection rate was 96.60% against the budgeted yield, which was 2.88% lower than last year and 0.38% lower than the previous quarter expected.

Business Rates Collection Fund was 94.01%, which was 4.71% lower than last year and 1.97% lower than the previous quarter.

Based on the current collection rates, the Collection Fund was in deficit by £11.168m at the end of the financial year, but this would not affect the 2020/21 position because the impact would be spread over the next three financial years. This had been reflected in the Revenue Budget for 2021/22.

A summary of spend on the Capital Programme by project for 2020/21 and financing sources was shown at Appendix A to the report. The final Capital outturn for 2020/21 was £5.476m, which was £8.043m lower than the revised budget.  Schemes that were underspent were largely affected by timing changes to planned expenditure due to the pandemic and this would be reflected in the 2021/22 Capital Programme.  Other reasons for the underspend related to slippage on the housing and commercial development scheme and in respect of the land swap at the former Bexhill High School site.

The net impact on Reserves of the 2020/21 outturn was a reduction of £1.761m, which was an improvement of £515,000 on the previous forecast.

The final Council outturn for 2020/21 was a deficit of £1.284m which included the impact of the COVID-19 pandemic. Officers continued to submit financial assessments of the impact of the pandemic to the MHCLG. It was not clear at this stage whether further grant funding over and above what had already been notified to the Council, would be forthcoming. The Council’s Medium Term Financial Plan reflected the additional use of reserves this year above the original budget but expected, with the delivery of savings and extra income, to be in surplus by 2024/25, when the Council would be able to start rebuilding its reserves. 

Members thanked the Finance Manager and his team for their work on the Council’s finances.

RESOLVED: That the report be noted.