Agenda item

To submit a report by the Director of Function (Resources)/Section 151 Officer.

The report of the Head of Function (Resources)/Section 151 Officer setting out the provisional revenue outturn position for the period 1 April, 2019 to 31 March, 2020 including the main budget variances was presented for the Executive’s consideration.

The Portfolio Member for Finance reported that the overall financial position for 2019/20 including Corporate Finance and the Council Tax Fund is an underspend of £0.308m which is significantly better than previously predicted and has come about largely as a result of services reducing expenditure during the final quarter of the year and the receipt of additional grant funding. This provides a welcome boost to the Council’s finances increasing the General Reserve to £7.061m which is especially important given the likely impact of the Covid-19 crisis which has already been felt in lost income and additional costs.

The Director of Function (Resources)/Section 151 Officer confirmed that the provisional revenue budget outturn result is a significant improvement on the projection at the end of Quarter 3.The better than expected outturn has been helped by specific items as well as lower than anticipated capital expenditure which resulted in lower borrowing and no significant calls on contingency budgets during the final quarter. A provision to reflect an adjustment  to the 2018/19 accounts in relation to bad debts which has been included in the figures since the beginning of the financial year has been re-considered and deemed unnecessary thereby leading to a saving of over £100k. Additionally, the closure of some services as a result of lockdown restrictions being imposed in the final two weeks of March has also contributed to the improved position.

The Officer said that Adult Social Care remains a source of concern having ended the financial year £1,138k overspent (4.5% of the budget) despite the Winter Pressures Grant of £371k without which the financial situation would be considerably worse. Although the Council approved a budget increase of £1m for Adult Social Care in setting the budget for 2020/21 in March, there is no certainty that this will be sufficient to meet the service’s needs especially as there may be increased pressure on the service as the Council emerges from the current crisis.

One aspect not covered by the report is the impact on school balances. Three of the Island’s five secondary schools are now in financial deficit with the total secondary schools deficit standing at £693k. Whilst nine primary schools are in a position of deficit the primary sector as a whole has a surplus of £975k. Overall, school balances have reduced significantly as schools have used funding in reserve to balance their budgets which would have been the case in 2020/21 as well albeit the effect on school budgets of their extended closure as a result of the current crisis is not yet known.

As part of the update on the revenue budget position the Executive was also asked to approve the release of £85k from general reserves to meet the cost of repainting Beaumaris Pier; the funding would supplement the Regulation and Economic Development Service’s existing reserve of £100k for the purpose thereby enabling the work to commence as soon as possible.

As a matter of information, the Director of Function (Resources)/Section 151 Officer advised that the Council’s draft accounts for 2019/20 had now been completed and would be published today in line with the statutory timescale. He took this opportunity to thank the Finance Service’s staff for accomplishing what is at the best of times an onerous task and which has been made even more challenging by current circumstances with a large proportion of the service’s staff working remotely. Being able to close the accounts in a timely way means that the formal audit  to verify the Council’s financial statements can now take place meaning  the Council can be clear about  its financial position at the end of 2019/20 and be assured that those figures will not change moving forwards into the new financial year.

The Portfolio Member of Finance added his own thanks to the staff of the Finance Service for their work both on completing the accounts and in responding to the current crisis and these were echoed by the Executive which also recognised the significance of the improved revenue budget position and the importance of maintaining reserves given the challenges the Council was likely to face in the coming year.

It was resolved –

•           To note the position set out in Appendices A and B of the report in respect of the Authority’s provisional financial performance at outturn for 2019/20.

•           To note the summary of contingency budgets for 2019/20 detailed in Appendix C to the report.

•           To note the position of the invest to save programmes in Appendix CH to the report.

•           To note the position of the efficiency savings for 2019/20 in Appendix D to the report.

•           To note the monitoring of agency and consultancy costs for 2019/20 in Appendices DD, E and F to the report.

•           To release £85k from general balances to ensure sufficient funding is available to undertake the painting work at Beaumaris Pier.