Issue - meetings

Background:

This report presented the results of the second round of revenue budget monitoring 2020/21. The report explained that since the Council had set a total budget requirement of £323.365million at its meeting on 20 February 2020, the Government had announced, in response to the Covid-19 pandemic, a wide range of financial support packages. These were for individuals, businesses and public sector bodies leading the response, including emergency funding for councils. A total of £65.422million of additional grant funding had been added to the revenue budget, taking the Round 2 budget requirement to a total of £383.426million. In addition, the first claim against the Government’s new income compensation scheme had been submitted, with an estimated £5.963million having been included in the revenue budget forecast in respect of that scheme.

The report set out that the forecast outturn for 2020/21 was a pressure of £2.486million.

The report explained the Council’s income from Council Tax and Business Rates was held in a ringfenced collection fund account, from which authorities drew the budgeted level of income in each year, irrespective of actual income collected. Any shortfall on income collected compared to that budgeted level resulted in a collection fund deficit which was recovered by reducing the amount of income the Council could budget for in the following year. There had been no shortfall in 2019/20 on Council Tax or Business Rates, with the current budget being underpinned by collection fund surpluses from the previous year. The Government had announced their intention to allow councils to recover any deficits over three years, rather than the usual one, however this would still represent a significant pressure on the revenue budget for 2021/22 and beyond.

Reasons:

Cabinet has the responsibility to ensure effective budgetary control to contain expenditure within the approved limits set by Council.