Agenda item

Report attached.

Members considered a report of Councillor Joyce Plummer, Portfolio Holder for Resources, onthe financial spending of the Council up to the end of January 2022 and the financial forecast outturn position for the Accounting Year 2021/22.

Councillor Plummer commented that the current forecast produced a positive variance of £85,000 by the end of the financial year.  This was an excellent result in the face of COVID-19, but was due in no small terms to additional Government funding provided.  It was unlikely now that there would be a further surge in COVID-19 that would significantly affect the 2021/22 financial position.  The Government had also now confirmed that COVID funding would be ring fenced and could be rolled forward into next year.

Across the Budget, adverse variances were largely due to reduced income generation based on the economic downturn due to COVID-19.  In particular, this had impacted the Council in the following areas:

• Market Hall – with extended concessions being provided to traders; and
• Commercial lettings – with difficulties in attracting new tenants.

However, with wider savings generated and careful financial management, a Budget surplus was being forecast for 2021/22.  A balanced Budget for 2022/23 had been set at the recent Council meeting, which would allow the authority to continue to meet its priorities and to help the local community to recover from the effects of the pandemic.

Approval of the report was not deemed a key decision.

Reasons for Decision

The detailed figures underpinning the report were shown as a table at the end of the document provided.

The spend for the first 10 months of the financial year to the end of January  2022 was £9,651,000 compared to a Budget of £10,389,000, giving a positive variance of £738,000 over the first 10 months of the year.

The current forecast spend to the end of the financial year in March 2022 was £11,142,000, compared to a Budget of £11,227,000.  This forecast produced a positive variance of £85,000 by the end of the financial year.

The Council had received additional financial support from Lancashire County Council (LCC) to meet the cost of continuing COVID-19 pressures over the second half of the year.  This would allow the Council to meet its current forecast spend in relation to COVID-19 activities for the remainder of the year.

So far, since the spike in cases caused by the Omicron variant, the Council had been able to provide the support the local community required within its current funding envelop and therefore unless there was a dramatic swing upwards in COVID-19 cases over the last part of the financial year, the Council would expect to maintain this position.  Any unspent balances of specific COVID-19 funding will be carried forward into the new year and used to continue to support the local community, as necessary.

The Budget forecast included large elements of expenditure and funding in connection with COVID-19.  As this was a new area of budget management, controls and management of the expenditure and income was not at the same high standard as for the authority’s normal budget expenditure.  There was, therefore, a higher degree of risk around these figures in the forecasts made.  Accountancy staff and Management were working to improve the thoroughness and accuracy of these figures.

The report included more detailed commentary about expenditure in the following service areas:-

• Environmental Services;
• Culture and Leisure Services;
• Planning and Transportation;
• Regeneration and Property Services;
• Policy and Corporate Governance; and
• Non-service Items.

The additional funding of £581,000 requested by the Council from Lancashire County Council to support its on-going work around COVID 19, had reduced the risk of an overspend this year and if COVID 19 activity largely remained as currently forecast, the Council should have sufficient funds to meet the known costs it expected to incur at this time.

There were no alternative options for consideration or reasons

Decision                                     -    That Cabinet notes the report on the Financial Position for the Year ending 31^st March 2022, as at January 2022, and asks Corporate Management Team to continue to reduce expenditure and increase income so as to further improve the overall financial position of the Council over the remaining months of the year.