Agenda item

To consider the Budget 2021/22 Forecast Outturn Quarter 2 report.

RESOLVED to:

I. Note the General Fund, Housing Revenue Account and Capital Programme forecast outturn positions

II. Approve the updated use of reserves and requested slippage for the Capital Programme.

The Chair presented the Budget 2021/22 Forecast Outturn Quarter 2 report to Cabinet, which detailed the financial performance of the General Fund, Housing Revenue Account, Treasury Management and the Capital Programme. He highlighted the variances to the General Fund resulting in a overspend of £648,000 and the continuing work arising from the pandemic. Furthermore, he outlined the change to General Fund reserves with the primary movement being the £3,130,000 due to the business rate reliefs awarded. He referred to the position on the Housing Revenue Account and Capital Programme, where he highlighted the £78,271,000 overspend relating to commercial investments, and that the £1,727,000 slippage for Walden Place had been reallocated to support the purchase of affordable homes to meet the Council’s right to buy requirements. He noted the terms of borrowing and interest rates outlined in the Treasury Management section. He proposed the recommendation set out in the report.

Councillor Jones had registered to speak on the item and was invited to address Cabinet. He said the report showed that there was an underspend of £200,000 for the Local Highways Panel and that in the previous two financial years the Council had made an additional £100,000 available to the Highways Panel. He said there were projects in the district that would benefit from such funding but the reality was that the Highways Authority had not requested this additional funding in the previous two years. He said the minutes of the Highways Panel meeting on 5 July 2021 showed that the matter had been discussed and members had been informed that due to timing and limited resources it would be difficult to implement additional highways schemes. However, the foundations could be put in place for further schemes in 2022/23. While he appreciated that the budget would be set by Council in February, he asked Cabinet to consider recommending additional funding for the Highways Panel in 2022/23.  

In response, the Chair said this matter was being considered along with all other budgetary requests as part of the budget setting process that would be considered by Full Council. He said concerns remained that the funding which had previously been made available had gone unutilised, although it would be in the interest of residents if further highway projects could be undertaken in the district.

Councillor Isham asked a series of detailed questions regarding changes to the CIPFA Code and what impact this would have on the Council’s Commercial Strategy.

The questions were as follows:

• What would the possible revisions to the CIPFA Code mean for the Council’s longer-term investments and to what extent would the Commercial Investment Strategy be impacted?
• Had the UDC borrowing been prudent investments in terms of CPFA guidelines?
• Had UDC investments departed from the guidance and code?
• If yes, were Cabinet, the Investment Board and all Members fully informed of the Council’s departure from the guidance and code? Were all the groups mentioned, fully aware of the implications and risks of departure from the guidance and code? Were all members aware of any legal advice available regarding departure from the code and where could this be found?
• What was the scale of risk and worst-case loss that could result if the Council were required to unwind these investments or even reschedule borrowing terms as a result of CIPFA changes?

The Chair undertook to provide written answers. Councillor Isham agreed to submit the questions in written form.

In response to a question from Councillor Caton regarding investment key performance indicators, the Chair said these were published as part 2 reports and circulated with members of the Investment Board. He said any member could request to attend the Investment Board but the figures were not public for commercial reasons.

In response to a question from Councillor Caton regarding the Council taking a long term bond, the Chair said at this point the matter was in abeyance.

In response to a question from Councillor Caton relating to the accounting of Little Canfield Business Park and why it did not show in the report, the Director of Finance and Corporate Services said it was a timing issue and it would appear in future reports.

Councillor Armstrong seconded the recommendation in the report.

RESOLVED to:

I. Note the General Fund, Housing Revenue Account and Capital Programme forecast outturn positions

II. Approve the updated use of reserves and requested slippage for the Capital Programme.