Agenda item

Finance Monitoring Report - July 2021


Councillor Nick Kelly (The Leader), and Brendan Arnold (Strategic Director for Finance) presented the Finance Monitoring Report – July 2021 to Members.


Key points highlighted to Members included:



the figures within the report would fluctuate over the course of the remaining months however it was hoped that they would travel in the right direction to balance the budget which was the key objective;



overall, in terms of the variants total, the Council had moved from a £1.276m overspend to a £1.446m overspend – this was highlighted as going in the wrong direction. Within the CCS directorate (Corporate and Customer Services Directorate) it had moved from £1.382m overspend to a £1.498m overspend. The Business Support Review, which fell under this directorate, had slipped by one month due to the impact of covid and this had had an adverse effect upon the timings/ savings. Within the overspend, there were other savings targets likely to be delivered later than planned, and included a legacy of £949,000 and the facility management saving target of £550,000. The Management Team continued to monitor the savings targets closely and assurance was given that the directorate was moving in the right direction; the August finance report included a positive significant move in the figures provided;



Members were aware of the unprecedented financial pressures on the Council’s finances due to the Covid 19 pandemic; those pressures still remained as infection rates in the city were above the regional and national averages. There was a commitment to continue to show the position of the additional costs and income lost due to Covid 19 which was currently showing a drawdown against grants of approximately £15.5m; these were set out in section b of the report. A full disclosure of revenue savings targets was included in appendix a of the report;



 against the directorate total savings target of £4.571m, there was £2.266m worth of savings on track which was just shy of the 50% target the Council was aspiring to achieve by the end of the year;



it was considered that the Council had now seen the peak of the element of forecast overspend described by the Leader. Officers were now preparing the period 5 financial report which would arrive for further discussion by scrutiny in the future. It was expected that there would be a very significant reduction in the variants described, and this followed on from the work linked to the management of the CCS finances. Officers were working hard with the directorate to mitigate the overspend identified.


Members raised the following key areas of questioning:



with regards to the Childrens Services Directorate and the addition to the department’s budget of £3m raised at the Council’s budget setting meeting, as well as the added one off payment of £7.914m covid relief grant from Government, what actions was the Leader taking to address the Childrens Services Budget? Could the Leader share if he had a plan b and what that was?


it was highlighted that Cabinet had completed 22 of the 86 manifesto pledges; how much had the completion of those pledges cost and where was this reflected in the budget?



it was considered that there was greater financial information included in the June financial report submitted to Council than the Finance Monitoring Report submitted to scrutiny. How did the Council have such an improved financial position in the Place directorate, yet still seem to demonstrate £1.5m of pressure?



did the Council have any action plans to mitigate the overspend and risk in both the People and Children’s Directorates budgets?



in the spirit of openness and transparency, could future finance monitoring reports be jargon free, user friendly with information supplied in a format and with language used that would be clearly understood by the general public?



the report implied that £1.498m overspend in the budget was due to legacy targets not yet realised – it was questioned what impact the failure to make savings last year effected this year’s budget and the ongoing effect for next year?


the Home to School Transport Plan was previously reported in the last financial year as being on target to be delivered, however this was not yet delivered in this financial year – why had it not yet been delivered?



what was the cost impact on the budget of the manifesto commitments that were still to be delivered this financial year?


It was discussed that more detailed information relating to specific manifesto commitments may need to be considered at future scrutiny meetings in a part 2 (private) session due to their commercial sensitivity or confidentiality.


The Committee agreed –



that a written response detailing the breakdown of the financial information regarding how much the completion of 22 of the 86 manifesto pledges costed would be provided to Members;



a briefing note would be provided by the Service Director for Finance to detail the difference in financial pressures and projected overspend, specifically in the Place Directorate, between period 3 and period 4 of the financial monitoring reports;



that future finance monitoring reports provided would be jargon free, with a plain and simple narrative to enable them to be better understood;



a written response would be provided clarifying why the Home to School Transport Plan was not yet delivered in this financial year when it was previously reported that it was on target for delivery;



the next Finance Monitoring Report submitted to the Performance, Finance and Customer Focus Overview and Scrutiny Panel would include reference to and details of risks in the budget, specifically with regards to the red and amber columns (plans worked on for delivery/ planned internal or external actions required  to deliver),  in order to allow scrutiny to better understand the extent of the risk and mitigating actions. Any increase in borrowing requirements and the impact on capital funds would also be specifically referred to;



a written response would be provided to Members detailing the cost, impact on the budget and potential mitigating actions of manifesto commitments still to be delivered in this financial year (2021/22);



risks associated with, and budget implications for manifesto commitments planned to be delivered in 2022/23, and 2023/24 (in order to inform the Medium Term Financial Plan) would be included as part of the budget scrutiny paperwork planned for January 2022;



to note the current revenue monitoring position in the Finance Monitoring Report – July 2021.



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