To consider the corporate financial update for Quarter 1, 2020/21.
Councillor Andrew Jarvis, Finance and Resources Portfolio Holder presented the Corporate Financial Monitoring report for Quarter One of 2020/21, highlighting the Council’s expenditure and income during the first three months of the financial year, but also including current projections of expenditure for the remainder of the year and officers’ planned actions to ensure a balanced budget by the end of the financial year. The report also detailed virement requests in relation to the Community Housing Fund, Next Steps Accommodation Programme and South Lakeland House/Kendal Town Hall. The report further sought approval for the continuation of the emergency decision to increase counterparty limits for Money Market Funds to £10m for the remainder of 2020/21.
Councillor Jarvis drew attention to an error in the information contained within the report in the section on the Collection Fund, at paragraph 3.5.3. The Council expected to collection £44.5m of business rates during 2020/21 and retained 40% of the income, so the total value of the reduction was £300,000, and not £85,000 as shown.
Councillor Jarvis explained how the Council’s financial position had been made more complex by Covid-19, with an estimated loss of £1.7m income in Quarter 1 of the current financial year and spend around £300,000 more than originally budgeted. During the quarter, it had become clear that Covid-19 would have a major impact, so budgets had been revised and approved by Cabinet and Council in June 2020. Overall, it was estimated that the impact of Covid-19 on the total cost of services in 2020/21 would be £800,000 higher than the £2.1m approved in June 2020, but it was expected that the recently approved Sales, Fees and Charges compensation grant from the Government would reduce the impact by around £1.4m to £1.5m overall. While it was impossible to clearly split the impact of Covid-19 from the normal business as usual costs, an overspend of £69,000 was currently projected for normal service costs. The impact of Covid-19 and delays in recovery action had resulted in higher levels of debt compared to previous years. Recovery action had now restarted and it was expected that new recovery posts should help the position.
Councillor Jarvis pointed out how the Council had not been distracted by the Covid-19 pandemic and had continued to monitor and control its budget and expenditure, and he thanked officers for their work during this busy time.
Councillor Jarvis moved the recommendations contained within the report and was seconded by Councillor Robin Ashcroft, Economy, Culture and Leisure Portfolio Holder. Councillor Ashcroft felt that the report demonstrated remarkable achievements in difficult times and stressed the importance of maintaining the finances of the Council during the current crisis.
No Member having raised concern when asked by the Chairman, it was
RESOLVED – That
(1) the contents of the report and Appendices 1 to 3 be noted; and
(2) the following be approved:-
(a) the continuation of the increase in counterparty limits for Money Market Funds to £10m for the remainder of 2020/21; and
(b) the virements set ... view the full minutes text for item 49