Agenda item

Consider report by the Executive Director, Finance and Regulatory, providing budgetary control statements for the Council’s General Fund (copy attached).

4.1       There had been circulated copies of a report by the Executive Director Finance & Regulatory providing the budgetary control statements for the Council’s General Fund based on actual expenditure and income to 30 June 2020 along with explanations of the major variances identified between projected outturn expenditure and income and the current approved budget.  As reported to the Council meeting on 27 August 2020, after the first quarter of 2020/21 a detailed budget review exercise had been undertaken to realign budgets in light of the financial implications of the COVID-19 response.  This analysis of the revenue budget 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.  As previously reported, there was likely to be a significant impact on the delivery of planned Financial Plan savings during 2020/21 as a result of the emergency situation.  Financial plan savings of £12.091m required to be delivered in 2020/21.  An analysis of deliverability had been updated as shown in Appendix 4 to the report.   Following the June month end £5.279m (44%) savings had been delivered permanently, £3.205m (26%) were profiled to be delivered by 31 March 2021 and £3.607m (30%) had been delivered on a temporary basis through alternative savings. Full details of pressures, risks and challenges and the significant majority of areas of the Council’s operation where budget plans remained on track were detailed in Appendix 1 to the report.   The Executive Director explained that the level of support provided by the Scottish Government in relation to the COVID-19 pandemic had not been sufficient to fund the full financial impact of COVID-19 including the significant impact on the level of income which funded local services.  Additional Scottish Government funding in the form of grant had addressed 33% of the total pressure identified with the welcome easing of restrictions in the use of specific grants taking this up to 50%.  The remainder of funding was required to be found from existing Council budgets and reserve balances. The current shortfall of £1.393m plus any further impacts, beyond the estimated shortfall, would require further funding to be identified in order for the Council to successfully manage the financial impacts of COVID-19 by 31 March 2021.  The report went on to detail key assumptions made in arriving at the figures; management actions for the remainder of the financial year with the aim of closing the current £1.393m gap; and a summary of the impact of COVID-19 related pressures on individual services. The Executive Director confirmed that any budget shortfall at 31 March 2021 would require to be funded from reserves. 

4.2       Members discussed the report and received answers to their questions from the Executive Director.  They recognised the turbulent time that the Council was going through and the challenge presented in terms of savings required.  They congratulated officers for their work to achieve the level of savings which had already been delivered on a permanent basis.  In response to a question about the assumption that Live Borders would not require additional financial support from the Council, the Executive Director confirmed that COSLA were currently discussing an income scheme with Scottish Government which it was understood would include ALEOs like Live Borders.  Members expressed regret that the Council would probably have to dip into reserves at the end of the financial year and the Executive Director confirmed that the Reserve Policy would need to be reflected in the budget planning process for 2021/22 with a view to replacing the sum used. 

DECISION

AGREED to:-

(a)          note the projected corporate monitoring position reported at 30 June 2020, the pressures identified, the underlying cost drivers of this position and the identified areas of financial risk as reflected in Appendix 1 to the report;

(b)          approve the virements attached as Appendix 2, following the revisions to the revenue budgets for 2020/21 approved by Council on 27 August 2020;

(b)          approve the virements in Appendix 3 to earmark budget into 2021/22;

(c)          note the progress made in achieving Financial Plan savings in Appendix 4; and

(d)          request the Corporate Management Team to continue to take all possible management action to balance the budget in the current year.