The Executive Director of Resources submitted a report setting out the projected revenue and capital outturn positions for 2020/21 for both the General Fund and the Housing Revenue Accounts (HRA) as at the end of December 2020 (Quarter 3). The financial reporting of the Council and Brighter Futures for Children (BFfC) had now been aligned and the report also included the Quarter 3 projections for BFfC.  The following documents were attached to the report:

·       Appendix 1 – Financial Monitoring for Quarter 3

·       Appendix 2 – Performance for Quarter 3

·       Appendix 3 – Covid-19 Related Grants Register

The report stated that the forecast General Fund revenue outturn position as at the end of Quarter 3 was a £4.820m underspend, which was an improvement of £5.487m since Quarter 2. This forecast included gross revenue pressures of £19.969m arising as a direct result of Covid-19.  The HRA was currently projecting an underspend of £5.133m as at the end of Quarter 3, an increase of £3.253m since Quarter 2.  The General Fund Capital Programme was forecast to underspend by £39.938m this year and the HRA Capital Programme was currently forecast to underspend by £18.138m, due to delays to the delivery of the Major Repairs Scheme and Phase 2 and Phase 3 of the New Build and Acquisitions Schemes.

The report explained that the forecast General Fund position assumed the use of £9.906m of the Direct Revenue Financing of Capital Earmarked Reserve in the current financial year (2020/21) to reduce the ongoing Minimum Revenue Provision charge to the revenue budget in future years.  This reserve had been set aside to mitigate against capital receipts not being realised and available for use as previously expected.  The impact of Covid-19 had meant that this reserve had to be released, but it was hoped that as the economy picked up the reserve would be able to be replenished.

The report noted that the forecasts included best estimates of the additional pressures arising as a result of Covid-19 and the associated government funding received up to the end of December 2020.  The combined gross revenue and capital pressures as a result of Covid-19 totalled £20.269m, which was a decrease of £0.081m from Quarter 2. This was offset by a total allocation of £13.269m of Central Government general support grant, £0.981m furlough grant and an estimated £6.000m in income compensation, as well as £0.989m of Arts Council grant to support Cultural Services.  Central Government had published the final guidance document in respect of the local government income compensation scheme for lost sales, fees and charges on 24 August 2020, and the first grant claim for £3.186m for the period April to July 2020 had been received on 3 December 2020.  Attached to the report at Appendix 3 was a register of the various Covid-19 related grants allocated to the Council.

Resolved –

(1)      That it be noted that the forecast General Fund revenue outturn position as at the end of December 2020 was a net underspend of (£4.820m), due to an overspend of £17.260m on services budgets mitigated by an underspend of (£1.830m) on corporate budgets and Government Covid-19 Grants of (£20.250m) which comprised (£13.269m) of general support funding, an (£0.981m) furlough claim and an estimated (£6.000m) income compensation claim;

(2)      That it be noted that the Housing Revenue Account was forecast to underspend by (£5.133m) as at the end of December 2020;

(3)      That it be noted that the General Fund Capital Programme was forecast to underspend by (£39.938m), and the HRA Capital Programme was forecast to underspend by (£18.138m) due to delays to the delivery of the Major Works Scheme and Phase 2 and Phase 3 of the New Build and Acquisitions Schemes as at the end of December 2020;

(4)      That £9.906m be drawn from the Direct Revenue of Financing of Capital Earmarked Reserve in 2020/21 to reduce the ongoing Minimum Revenue Provision charge to the revenue budget;

(5)      That the 2020/21 General Fund underspend, currently forecast to be (£4.820m), be added to earmarked reserves to mitigate against this release of reserves and the anticipated use to balance the 2021/22 budget gap.