Agenda item

Consider report by Executive Director Finance & Regulatory.  (Copy attached.) 

With reference to paragraph 5 of the Minute of 25 June 2020, there had been circulated copies of a report by the Executive Director, Finance & Regulatory, providing an update on the current financial position of the 2020/21 budget and proposing a re-alignment of resources to amend the budget approved by Council on the 26 February 2020 budget in response to the COVID-19 pandemic.  The report explained that an in-year budget exercise to review both revenue and capital budgets had been undertaken by the Corporate Management Team (CMT) based on the first quarter (June 2020 month end) position and recommendations to revise these budgets were now submitted for approval.  The COVID-19 emergency situation, currently affecting the UK, had caused unprecedented pressure on society and the economy with significant financial challenges that were continuing to change and emerge.  The pandemic had caused a major impact on delivery of public services, with the Council having a key role to play in supporting Borders communities, businesses and residents during this time.  As well as directly dealing with the impact of the virus and protecting communities, the Council was now re-opening key public services across the region, in line with the Scottish Government’s Route Map.  In June, an initial assessment of the revenue impact of COVID-19 on the Council’s finances projected pressures of £15m excluding any impact on Council Tax at that point.  The Corporate Management Team had since undertaken an exercise to re-plan the Council’s 2020/21 revenue and capital budgets based on the June 2020 month-end position and this was summarised in Appendix 1 to the report.  The analysis of the revenue budget, now including a projected impact on Council Tax, had highlighted estimated revenue budget pressures of £20.449m and available resources of £19.056m from a combination of in-year savings and additional grant support leaving a residual budget pressure, based on current forecasts, of £1.393m.  The approach to the review of the capital budget had focussed on assessing the impact of the national “lockdown” of the construction industry and the associated inevitable delays in current and planned programmes of work.  The overall impact on the capital plan was that net £26.855m of budget within the Capital Plan had moved as a timing movement to future years with a movement from base budget of £96.953m to a revised plan of £70.098m.  This revised plan was based on a review of deliverability of the Plan with revised budgets now representing what project managers were forecasting would be spent and delivered during the remainder of 2020/21.  Members congratulated Mr Robertson and his team for their work to date but acknowledged that there were still a number of challenges ahead.

DECISION

AGREED to:-

(a)     approve the revisions to the revenue and capital budgets for 2020/21 as set out in Appendix 1 to the report and note that these would be included as virements within the Executive monitoring report in September;

(b)    note the ongoing management action being undertaken to aim to bring the revenue budget to a balanced position, if possible, by 31 March 2021;

(c)     note that any budget shortfall at 31 March 2021 would require to be funded from Reserves; and

(d)     note that future monitoring reports would be presented to the Executive Committee as part of the revenue and capital monitoring processes.