Agenda item

*RESOLVED –

That it be recommended to full Council:

1.   That the financial performance of the General Fund Revenue Account for the first half of the financial year and the updated medium-term financial forecast, as set out in sections 5 and 7 of the officer’s report, be noted.

2.   That the General Fund reserves position, as set out in section 6 of the officer’s report, be noted.

3.   That the updated General Fund capital programme, as outlined in section 8 of the officer’s report, be noted.

4.   That the additions to the General Fund capital programme, as set out in paragraph 8.3 of the officer’s report, be approved.

5.   That the financial performance of the Housing Revenue Account for the first half of the financial year, as outlined in section 9 of the officer’s report, be noted.

6.   That the proposed compensation mechanism and cost recovery model to address the income shortfall to the Operational Services Division (OSD) trading account, as set out in sections 5.3 and 9.1 of the officer’s report, be approved.

7.   That the budget preparation guidelines, as set out in paragraph 10.1 of the officer’s report, be approved.

REASON FOR DECISIONS

To actively manage the Council’s finances in the current financial year and forecast forward the emerging budget position to future financial years.

The Acting Chief Finance Officer presented a report outlining the Council’s budget position at the end of the second quarter of 2020/21, and the updated medium term financial forecast through 2024/25.

A revised year end deficit of £3.246m had been reported to members on 15 July, 2020. At the end of the second quarter, the forecast position had changed to a deficit of £192k at the year end.

A table containing the key variances that had contributed to the improved budget position was included in paragraph 5.1 of the officer’s report. The variances included the Covid 19 grant received from the Ministry for Housing, Communities and Local Government (MHCLG) and an additional windfall payment from the Derbyshire Business Rates Pool for 2019/20. The report also outlined the impact of Covid 19 on income generation and identified which income losses could be partially offset by MHCLG’s income compensation scheme.

The report noted the anticipated movement in the council’s reserves. An uncommitted balance of £1.116m remained in the budget risk reserve and service improvement reserve.

The General Fund Capital Programme was forecast to receive £1.2m from capital receipts in 2020/21. Further capital receipts from land and property sales would need to be identified beyond 2021/22 to fund new capital projects and reduce the pressure on the General Fund revenue budget.

The Housing Revenue Account budget was detailed in section 9 of the officer’s report. The report noted that rent arrears were forecast to rise due to the impact of Covid 19. As a result, the bad debts provision had been increased to a total of just under £2.2m for 2020/21. The HRA Business Plan was due to be reviewed shortly, which would lead to necessary revisions to both the HRA revenue and capital budgets.

*RESOLVED –

That it be recommended to full Council:

1.    That the financial performance of the General Fund Revenue Account for the first half of the financial year and the updated medium-term financial forecast, as set out in sections 5 and 7 of the officer’s report, be noted.

2.    That the General Fund reserves position, as set out in section 6 of the officer’s report, be noted.

3.    That the updated General Fund capital programme, as outlined in section 8 of the officer’s report, be noted.

4.    That the additions to the General Fund capital programme, as set out in paragraph 8.3 of the officer’s report, be approved.

5.    That the financial performance of the Housing Revenue Account for the first half of the financial year, as outlined in section 9 of the officer’s report, be noted.

6.    That the proposed compensation mechanism and cost recovery model to address the income shortfall to the Operational Services Division (OSD) trading account, as set out in sections 5.3 and 9.1 of the officer’s report, be approved.

7.    That the budget preparation guidelines, as set out in paragraph 10.1 of the officer’s report, be approved.

REASON FOR DECISIONS

To actively manage the Council’s finances in the current financial year and forecast forward the emerging budget position to future financial years.