Agenda item

To allow scrutiny of the level of spending and exposure against the Council’s Revenue budgets and reserves and balances for the first three months to 30 June 2021.

Mr Mark Golden, Head of Accountancy presented the financial performance monitoring as at month 3 to the Board. He highlighted that after a successful year with regards to financial performance in 2020/2021 the forecast as at month 3 suggested that the Council was expecting a challenging year ahead with an overspend of £6.6 million predicted, which would eradicate the working balances brought forward from the previous financial year. He noted that a significant proportion of this related to Covid at £3.5m. Added to the £3.2m from 2020/2021, there were now total Covid costs of £6.7m not reclaimable or covered by government grants and so lobbying needed to continue in this regard.

In relation to Children’s Services, an overspend of £3.6 million had been forecast and whilst looked after children numbers were currently below 600 for the first time since September 2019, unit costs were increasing and had risen by 25%. This was representative of the market and a national issue. A medium term financial plan for Children’s Social Care had been approved last summer and whilst savings were not happening as fast as planned there was a year on year reduction in costs forecast. In 2020/2021 children’s social care spend was £54.3m and at month 3 in the current financial year the service was forecast to spend £52.6m, so a reduction of £1.7m.

It was noted that whilst Adult Services was only forecasting an overspend of approximately £300k there were underlying pressures emerging that were currently covered by Covid funding, however, it was expected that the funding would not continue into the new financial year. The service was currently providing more than 2,000 hours a week in homecare than before the pandemic. Earlier hospital discharges were resulting in more clients but also because of early release the patients tended to require more support. Funding had been received in 2021/2022 from the Clinical Commissioning Group but there was no confirmed grant support for 2022/2023. The Board was informed that partnership working with health colleagues in advance of the 2022/2023 budget was planned and Members noted that the overspend within Adults Services was an area of concern and a high risk area due to different behaviours post Covid. It was an emerging demand that required close scrutiny.

Mr Golden noted that the financial performance of the Council’s wholly owned companies had been better than expected due to better trading and government support, particularly with the transport company. At month 0, losses had been forecast at £5.6m but at month 3 this had reduced to £4.5m and the trajectory was improving. He also reported that Council Tax and Council Tax Reduction Scheme income collection rates were slightly higher compared to last year. It was reported that the government had recently announced that a three year spending review would be held on 27 October 2021 alongside the Autumn Budget and that this would aid financial planning, an improvement on the annual settlements of the previous two years.

Members specifically referenced the overspend caused by the extension of the illuminations and queried whether it was a priority. In response, Councillor Lynn Williams, Leader of the Council advised that the additional funding had been agreed as an investment into the town in order to extend the season and provide additional customers for businesses across the town for longer. Further concern was raised that leaving the illuminations fixtures up year round also increased costs and might potentially impact their maintenance and longevity. Mr Golden agreed to look into the maintenance programme of the illuminations to ensure that it was cost effective.