Members received and considered the report of the Finance Manager on the Revenue Budget and Capital Programme Monitoring Quarter 1 2021/22.  The report contained details of the significant variations of the Revenue Budget and updated Capital Programme.

Since the detailed budget had been approved by Cabinet in February 2021, there had been one reportable virement. Staff turnover of £288,000 was originally budgeted centrally but had since been consolidated into departmental salary budgets.

The revenue forecast showed a deficit of £144,000, against the approved budget drawdown from Reserves of £2.7m. The main reasons for the variations were detailed in the report, which included planning appeal costs, the procurement of support from Capita for the Planning department, the delayed drawdown of the £50,000 grant by the Sussex Wildlife Trust for the development of the community wildlife garden at Rye Harbour, a forecast shortfall in car parking income resulting from the recent lockdown and a shortfall of £474,000 in the Financial Stability Programme’s savings target.

Since the budget was approved, the Council had received further additional grant funding of £317,000 from the Ministry of Housing, Communities and Local Government (MHCLG) to offset partially the over spends and the slowing of the Council’s capital investment programme due to the ongoing impact of the pandemic is forecast to reduce financing costs by £688,000.

The Capital Programme forecast as at 30 June 2021 had increased by £1m against the approved budget; the position was summarised in Appendix B to the report.  The biggest change since the Capital Programme had been approved in February 2021 was the North East Bexhill Office Development scheme, which had been removed from the programme due to the high degree of uncertainty surrounding it. This had reduced the estimated outturn by £15.737m. Other changes included an approved increase of £6 million to fund the purchase of further Temporary Accommodation units and scheme slippage from 2020/21 totalling about £9 million.

The Council had been successful in securing additional grant funding from the MHCLG and Homes England to support its existing Housing First (HF) Project as part of the wider East Sussex Rough Sleeper Initiative (RSI). The grant award was for £391,050 and would support the purchase of a further four units of HF accommodation to add to the four existing units already in operation, further reducing the cost to the Council of temporary accommodation. The remainder of the capital funding (approximately £320,000) would be secured from the £6m approved for the purchase of temporary accommodation. The capital grant was supported by a total revenue grant allocation of £84,000, covering the period 2021/22 and 2023/24, to fund the RSI Housing First workers who would support the former rough sleepers living in the accommodation.

The forecast impact on Reserves was a reduction of £4.282m against the planned use of £3.319m, an increase of £963,000.  The amount of Reserves required to balance the revenue budget was forecast to increase by £144,000.  Several capital schemes originally planned to be funded from revenue reserves in 2020/21 had slipped into 2021/22; the additional drawdown was £819,000 and was shown in Appendices B and C to the report.

The collection rate at the end of Quarter 1 for the Council Tax part of the Collection Fund was 29.92% of the collectable debit, which was 1.46% higher than the corresponding figures in 2020/21.

The collection rate at the end of Quarter 1 for the Business Rates part of the Collection Fund was 33.61% of the collectable debit, which was 0.91% lower than the corresponding figure in 2019/20.

The Assistant Director, Resources and the Finance Manager would work closely with Heads of Services and Members to reduce the forecast overspend and its impact on reserves.

RESOLVED: That:

1)         the report be noted; and

2)         Cabinet be recommended to approve a grant offer of £391,050 from the Ministry of Housing, Communities and Local Government to support the purchase of further accommodation units as part of the East Sussex Rough Sleeper Initiative.