Members received and considered the report of the Chief Finance Officer on the Revenue Budget and Capital Programme Monitoring Quarter 1 2022/23.  The report contained details of the significant variations of the Revenue Budget and updated Capital Programme and included a brief update on the Collection Fund performance.

Since the detailed budget had been approved by Cabinet in February 2022, there had been one reportable virement. The budget for the Bexhill Town Forum (£5,000) was transferred to Acquisitions, Transformation and Regeneration to fund Christmas lights in Bexhill.

The revenue forecast indicated a surplus of £347,000, against the approved budget drawdown from reserves of £3.2m. The main reasons for the variations were detailed in the report, which included external staff resources for the Planning department, increasing number of clients in temporary accommodation, additional car parking income, external staff to manage the Council’s housing company accounts, financing costs, additional interest income from investments and several small grants from the Department of Levelling Up, Housing & Communities.

The Capital Programme comprised a range of strategic projects that spanned more than one year and many operated for several years or had recurrent investments. Projects that had not spent all their allocation in the year of inception had the remaining funding carried forward into the next financial year, known as ‘slippage’. The Chief Finance Officer was working with Heads of Service to undertake a fundamental review of slipped capital schemes in 2021/22 and 2022/23 and the outcome would be reported to Members in the Quarter 2 monitoring report.

The programme included two new schemes since it was approved: the purchase of a property in Buckhurst Place for £10.5m as part of the £35m approved Property Investment Strategy and the redevelopment of a Council-owned site at Beeching Road/Wainwright Road, Bexhill for £15m.  The forecast out turns had been derived from reviewing the project cashflows and assessing the expected position at the time. Up to £68m was forecast to be spent in the current financial year.

The forecast impact on reserves was a drawdown of £3.252m, which was £308,000 lower than the planned use of £3.560m.

The collection rate as at 31 May 2022 for the council tax part of the Collection Fund was 20.86% of the collectable debit, which was 0.08% higher than the corresponding figure in 2021/22.  The collection rate as at 31 May 2022 for the business rates part of the Collection Fund was 21.88% of the collectable debit, which was 0.86% higher than the corresponding figure in 2021/22.  Collection rates had held up well despite the pandemic, but the current economic situation could lead to a decline in future collection rates, which would have an adverse impact on the income that the Council receives from council tax and business rates.

The revenue forecast for Quarter 1 2022/23 was a deficit of £2.839m, which was £347,000 lower than the approved planned use of reserves. The Chief Finance Officer would work closely with Heads of Services and Members to reduce areas of overspend and its impact on reserves.

The Council’s capital programme was forecast to underspend by £42.4m against the revised budget. Slippage relating to schemes in both 2021/22 and 2022/23 would be reviewed by the Chief Finance Officer and Heads of Services and carried forward into the following financial years following if required.

RESOLVED: That the report be noted.