Agenda item

The budget monitoring report sets out the Capital, Housing Revenue and General Fund Revenue budget performance to the end of July 2020. 

The Cabinet

            RESOLVED – That

(1)       The report in Appendix 1 be noted;

(2)          It be noted that the Council’s Budget for 20201/21 is at risk of being exceeded because of the additional expenditure and loss of income due to the Covid-19 Pandemic

The Deputy Leader of the Council and Cabinet Member for Corporate Support introduced this report outlining that financial performance was monitored on a regular basis to ensure that spending was in line with Council policies and that net expenditure was contained within overall budget limits.  However, 2020/21 was proving to be an exceptional year with significant additional financial risks due to Covid-19.  These risks had been clearly set out within the report which focused on performance against approved budget to the end of July 2020 in relation to the General Fund, Housing Revenue Account and capital expenditure. 

The Financial Services Manager then presented the report confirming that this was the first full budget monitoring report for this year and since the outbreak of Covid-19.

There was an adverse budget variation of £428k at the end of July 2020.  The breakdown of this variation had been set out at Table 2.1 with further explanations contained in the report.  The Financial Services Manager stated that it should be noted that a considerable proportion of this was due to a loss of income which was £454k under achievement. How the income would behave moving forward was extremely difficult to predict, but it was anticipated to worsen in the winter months due to the pandemic. 

The largest expenditure pressures on the Council were:

·         Leisure Support which was subject to a further report on the agenda for this meeting;

·         Homelessness, including Rough Sleeping; and

·         to a lesser extent, internal costs such as home working and health and safety.

Leisure Support expenditure variation had been covered by the supplementary estimate approved at Full Council on 15 July 2020) 

It was explained that when the Covid-19 grant of £1.874m was applied, pro rata, (£625k) this resulted in an estimated outturn General Fund balance of £6.250m.  This was approximately £250k worse than original budget.  This was shown in Table 6.2 of the report.  However, this figure needed to be treated with caution as it assumed that the variation continued at the current level.

When looking at the Covid-19 returns to Central Government, which were extrapolated to the end of the financial year, it was anticipated that the deficit could be closer to £1m if no mitigation was applied. 

Cabinet was asked to also note that there were many smaller underspends in service areas which as the year progressed were likely to make a significant contribution towards the adverse budget variation and therefore provide some budget mitigation.

In conclusion, the report highlighted that the Council needed to be flexible in its approach to finance this year, including having schemes and project that could be turned off at short notice if the situation worsened and if the Council did not receive any further general Government support.

In discussing the report, the Cabinet Member for Residential Services, Councillor Mrs Gregory confirmed that there was one piece of good news to share which was that in relation to Residential Services, the Council had been awarded the sum of £319k from the Rough Sleeping Initiative.  In addition to this, the Council was making a further claim in the sum of £21k which could reduce the overspend relating to homelessness.

The Chairman then invited non-Cabinet Councillors to ask questions.

A question was raised in relation to what was being explored in terms of attracting rental income for the empty upstairs space at the Bognor Regis Arcade.  Councillor Oppler responded confirming that this was an ongoing issue and that Officers were looking into the best way forward to ensure the best future of the arcade.  The Cabinet Member for Technical Services, Councillor Stanley, was invited to provide input as this fell under his portfolio area.  The Chief Executive responded first stating that a report was being prepared for a future meeting of Cabinet.  Councillor Stanley outlined that there were several feasible options coming forward that required thorough examination, the report mentioned by the Chief Executive would address these. 

The Cabinet

            RESOLVED – That

(1)          the report in Appendix 1 be noted; and

(2)          the Council’s Budget for 2020/21 was at risk of being exceeded because of the additional expenditure and loss of income due to the Covid-19 pandemic.

The Cabinet confirmed its decision as per Decision Notice C/007/210920, a copy of which is attached to the signed copy of the Minutes.