Decision details

Financial Performance - Outturn 2021/22

Decision status: Recommendations Approved

Is Key decision?: No

Is subject to call in?: Yes

Decisions:

Purpose of Report

 

To present the provisional 2021/22 financial outturn position on the Council’s revenue and capital budgets, including: the Council’s general fund; housing revenue account (HRA); housing repairs service; and capital programmes.

 

To seek approval for the proposed transfer to General Fund and HRA earmarked reserves; and to consider new general fund carry forward requests. 

 

To note the financial changes to both the General investment Programme and the Housing Investment Programme that were above the 10% budget variance limit, as delegated to the Chief Finance Officer.

 

Decision

 

(1)  That the provisional 2021/22 financial outturn for the General Fund, Housing Revenue Account, Housing Repairs Service and Capital Programmes, as set out in sections 3 – 7 of the report, and in particular the reasons for any variances, be noted.

 

(2)  That the proposed transfer to General Fund and HRA earmarked reserves, as detailed in paragraph 3.6, 3.7 and 4.6 of the report, be approved.

 

(3)  That the new General Fund carry forward requests, not requested at quarter 3, as detailed in paragraph 3.8 of the report, be approved.

 

(4)  That the financial changes to both the General Investment Programme and the Housing Investment Programme, as detailed at paragraphs 7.4 and 7.11 in the report, that are above the 10% budget variance limit delegated to the Chief Finance Officer, be noted.

 

Alternative Options Considered and Rejected

 

As detailed in the report.

 

Reasons for the Decision

 

The report covered the General Fund Revenue, Housing Revenue Account budgets and Investment Programmes for the current financial year and set out the provisional financial outturn position.  Following the unprecedented impact of Covid-19 on the Council’s finances in 2020/21, budgets for 2021/22 were revised as part of the Medium Term Financial Strategy (MTFS) 2021-26 based on a number of assumptions around the speed and extent of the national and local recoveries particularly in relation to income budgets.  Whilst in many cases these assumptions had reflected the actual position to date and had in fact exceeded assumptions, there were still some areas where the rate of recovery was impacting adversely on the Council’s finances.

 

In addition, the impact of Covid-19 was still being felt throughout the authority in relation to service delivery both in terms of backlogs of outstanding work but also due to the current economic operating conditions in terms of supply chain issues, escalating costs and availability of labour etc, whilst these issues were being addressed, they were likely to continue in the medium term and impact on the Council’s finances. Coupled with the current economic conditions of spiralling inflation, the Council would continue to face a number of significant financial challenges in 2022/23 and must ensure that its general balances and reserves were sufficient to respond to such pressures.  

 

Although the report had set out the financial outturn, which for the general fund and HRA had resulted in a positive position, the did not mean that the financial issues faced by the Council had been resolved. Beyond 2021/22, the Council was set to face ongoing pressures from the escalating inflation impacts, service demands arising from the cost of living crisis and the legacy of impacts of Covid-19.  The Council would continue to face financial challenges in 2022/23 as it responded to these issues, as well as ensuring it delivered the ongoing reductions in the net cost base that were already assumed in the MTFS for 2022/27.

Report author: Jaclyn Gibson

Publication date: 24/06/2022

Date of decision: 20/06/2022

Decided at meeting: 20/06/2022 - Executive

Effective from: 02/07/2022

Accompanying Documents: