Agenda item

Consider report by Director, Finance & Corporate Governance. (Copy attached).

2.1       There had been circulated copies of a report by the Director, Finance & Corporate Governance providing budgetary control statements for the Council’s General Fund based on actual expenditure and income along with explanations of the major variances identified between projected outturn expenditure/income and the current approved budget.  The Council had continued to experience impacts from the COVID-19 pandemic into the new financial year with a number of variations from budget evident.  The report explained that due to the very challenging operating environment it remained essential that the Council continue to operate as efficiently as possible to ensure that any financial implications not yet clear could be managed as the financial year progressed.

2.2       Forecasts had been completed at the third quarter of 2021/22 at 31 December which projected the Council to be in a balanced position at the financial year end.  The position was a net increase of £0.729m in the Covid-19 reserve compared to the reported position at the end of the second quarter of the current year.  The forecast position included the carry forward of resources from 2021/22. Impacts from Covid-19 were expected to continue in to 2022/23, the Covid-19 reserve would be drawn down as required to meet identified financial pressures.  The latest forecast detailed 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.

2.3       The report outlined that significant confirmed funding was in place for 2021/22, with a commitment that additional expenditure incurred through the Integration Joint Board (IJB) delivering Health & Social Care services be funded by the Scottish Government.  The report detailed the breakdown of confirmed COVID-19 funding for 2021/22, stating that a total of £32.913M was available.  The total COVID-19 funding was split between funding which had been ring-fenced to be used for a specific purpose (£14.733m) such as education recovery, IJB funding, admin funding and funding to support communities, and that which could be used more generally by the Council to address COVID-19 pressures (£18.180m).  Full details of funding available was provided in Appendix 2 to the report.

2.4       There had been an ongoing impact on the delivery of Financial Plan savings during 2021/22 as a result of the diversion of management time to the pandemic during 2020/21 and into 2021/22.  The level of savings required by the financial plan, totalled £9.301, in 2021/22 and an analysis of delivery of savings was provided in Appendix 3 to the report.   Following the December month end savings of £2.687m were delivered permanently, £0.696m was profiled to be delivered by 31 March 2022 and £5.918m was to be delivered on a temporary basis through alternative savings.

2.5       The Director, Finance & Corporate Governance, Mr David Robertson, presented the report, answered questions from Members, and drew particular attention to the appendices attached to the report.  Regarding the Bellwin scheme, an emergency financial assistance programme that allowed local authorities to claim for financial support associated with unforeseen costs arising from emergency incidents, the Director advised members that the Council had incurred approximately half of the costs required to make a claim, and that the costs associated with the flooding event in Hawick and Storm Arwen would therefore have to be absorbed by the Council.  In response to a question on forward purchasing of electricity by the Council, the Director explained that the Council had purchased the vast majority of its electricity for the next financial year in advance, alleviating the need to put additional money into that area of the budget.  The Director acknowledged that rises in energy prices could become more of a pressure in future years, but that he hoped ongoing work to increase the energy efficiency of Council owned buildings would minimise the impact of rises in price.

DECISION

AGREED to:-

(a)     note the projected corporate monitoring position reported at 31 December 2021, the remaining 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)     the Covid-19 funding detailed in Appendix 2;

(c)     the progress made in achieving Financial Plan savings in Appendix 3; and

(d)     approve the virements attached as Appendices 4 and 5.