Agenda item

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

2.1       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 31 December 2020 along with explanations of the major variances identified between projected outturn expenditure and income and the current approved budget.  As reported to the Executive Committee of 17 November 2020 after the first quarter of 2020/21 a residual COVID-19 budget pressure of £0.628m remained, based on forecasts at that point. Forecasts had now been updated to the third quarter of 2021/21 and based on the 31 December a balanced outturn position was forecast at the 31 March 2021.  The latest forecast included all known pressures including loss of income, confirmed Scottish Government funding, the effects of the continued freeze on discretionary spend and assumptions around delivery of Financial Plan savings.  This position reflected an improvement of £0.628m from the second quarter.  During the year financial returns had been made on a quarterly basis to ensure that expenditure associated with social care was included within a return collated with NHS Borders and submitted to Scottish Government as a COVID mobilisation plan. Funding had then been distributed via Health to the Council and this balanced position assumed within H&SC that all H&SC additional expenditure related to COVID-19 would be funded by Scottish Government through the mobilisation return process. As previously reported, there had been 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 has been updated as shown in Appendix 4 to the report.   Following the December month end £5.670m (47%) savings had been delivered permanently, £0.645m (5%) were profiled to be delivered by 31 March 2021 and £5.776m (48%) had been delivered on a temporary basis through alternative savings.  It should be noted that the highly uncertain environment in which the Council was operating may impact on delivery of the remaining £0.645m savings which still required to be delivered before 31 March 2021. 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.

2.2       Members discussed the report and received answers to their questions from the Executive Director, David Robertson.  The Executive Member for Economic Regeneration and Finance thanked Mr Robertson and his team for their work and drew attention to the huge achievement, under current circumstances, of managers across the Council in identifying savings to project a balanced position at the end of the financial year. In response to a question about Specific Grant flexibility around the use of funds freed up from Early Years expansion Mr Robertson confirmed that the approach had not changed in that the funding was ring-fenced within Education and that the Council had made a commitment in full in terms of Early Years expansion and delivery of 1140 funded hours. In terms of the projected annual additional COVID-19 pressures detailed in a table within the report, Mr Robertson explained that the estimate of £0.604 impact on income from Council Tax was related to the estimated collection levels for 2020/21 including the impact of delays in house building. Clearly the pandemic would have a significant temporary effect on the local economy and affect income from fees, charges and Council Tax.  The assumption was that there would be a bounce back but this would be closely monitored. Mr Robertson added that, where families faced financial difficulty in repaying Council Tax debt the Council had a range of flexible payment arrangements to offer.

DECISION

AGREED to:-

(a)          note the projected corporate monitoring position reported at 31 December 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;

(c)       approve the earmarked balances attached at Appendix 3, noting the support these balances were providing to the 2021/22 Financial Plan totalling £1.562m;

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

(e)       delegate authority for the remainder of the financial year to allow the Executive Director, Finance & Regulatory to approve any year-end adjustments required for COVID-19 related funding expected late in the financial year; and

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