Agenda item

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

2.1       There had been circulated copies of a report by the Director, Finance & Corporate Governance which provided a statement comparing final revenue outturn expenditure and income for 2021/22 with the final approved budget for the year along with explanations for significant variances.  A net, unaudited outturn underspend of £1.427m was achieved in the 2021/22 revenue budget.  The £1.427m net underspend (less than 0.5% of final approved budget) was delivered following a number of earmarked balances carried forward from 2021/22 into 2022/23.  In total, those amounted to £37.189m and related to a number of initiatives across the Council and specifically included £9.465m of carry forward into the Council’s COVID-19 reserve and £1.599m of carry forward by schools under the Devolved School Management scheme (DSM).  Council services had delivered an underspend position whilst delivering significant financial plan savings totalling £9.301m.  A high level summary of the outturn position in each Service was detailed from section 3.16 of the report.  The Council’s finances and operating model had continued to be affected by the COVID-19 emergency situation during 2021/22 as well as unprecedented market conditions and inflationary pressures, pressures from pay award and staff recruitment and retention challenges. The Council had administered £73.9m of funding which had been passed to over 5,770 businesses through a variety of business grants.  The COVID-19 reserve was utilised during 2021/22 to maintain public services utilising further specific support from Scottish Government to support individuals and businesses during the pandemic.  The challenging operating environment had included significant recruitment and retention issues across the Council which contributed to the year-end underspend position but resulted in capacity issues with a number of teams experiencing recruitment issues in filling vacant positions.  During 2021/22 detailed revenue monitoring reports were reviewed by the Strategic Leadership Team (SLT) allowing proactive corporate management action to be taken during the year where required.  In line with Financial Regulations quarterly monitoring reports were approved by the Executive Committee, authorising the necessary adjustments to the budget throughout the year.  There had been an impact on the delivery of approved Financial Plan savings during 2021/22, mainly as a result of the COVID-19 response and recovery phase with slippage experienced in the delivery of planned savings. The level of savings required by the financial plan, totalled £9.301m, in 2021/22.  An analysis of delivery of savings was provided in Appendix 3 to the report. The outturn position showed that £3.489m (37%) savings were delivered permanently in line with approved plans, £1.932m (21%) were delivered in 21/22 with no requirement for the savings to be delivered from 2022/23, with the remaining £3.880m (42%) delivered on a temporary basis through alternative savings.

2.2       The Financial Services Manager, Ms Suzanne Douglas, presented the report and responded to Members questions. Regarding the shift in position from an underspend to an overspend within the learning disability service, the Chief Executive explained that the financial reporting reflected that in the last Quarter there had been underspend within that Quarter, however across the year there had been the overspend reflected within the report.  In response to a question regarding funds earmarked for Devolved School Management (DSM), Ms Douglas explained that there had been a higher than expected amount of carry forward of budget by schools, a new DSM scheme was being developed and was expected to come to full Council following the summer recess. Members requested a briefing on the DSM Review.In response to further questions regarding the overspend within the learning disability service, Ms Douglas explained that the difficulties the service faced had been raised early in the financial year, work was ongoing to manage the issues – action plans were in place to contain costs and specific plans designed to deliver savings. The financial position had improved within the final Quarter of the year, with an improved income position and reduced client care packages providing financial benefits.  In response to a question regarding the underspend listed under “generic services”, Ms Douglas agreed to investigate and provide further details, and suggested that the underspend was due to lower than expected costs incurred related to the Carers Act.  Regarding issues with recruitment and an underspend on staffing costs, the Director – People, Performance and Change explained that work was ongoing to address recruitment and retention problems, and that a report would be brought to the Committee outlining the steps that were being taken to address those problems.

DECISION

AGREED :-

(a)     the content of the report and noted the favourable outturn position for 2021/22 prior to Statutory Audit;

(b)     to note that the draft unaudited outturn position would inform the budgetary control process during 2022/23 and inform the financial services planning process for future years;

(c)     to approve the sums earmarked under delegated authority by the Director, Finance and Corporate Governance as well as adjustments to previously approved earmarked balances as shown in Appendix 1 to the report; and

(d)     to note the range of pressures associated with the current operating environment will be reported through the monitoring process during 2022/23.