Agenda item

Cllr R C Evans

Key Decision identified as 2019/20 Outturn Report and Initial Trends for 2020/21 in the Notice of Key Decisions published on 20 May 2020.

Councillor R C Evans, Cabinet Member for Finance, Commercial Services and the Economy presented the report of the Director: Finance & Human Resources, Chief Finance Officer.

Cabinet Members noted that despite the significant financial impacts relating to the flooding of Ironbridge Gorge and the start of the coronavirus (CV-19) pandemic, the Council had ended the year in a positive financial position. The Council had not had to make any use of unplanned reserves in 2019/20 and had retained a prudent level of balances. This would support the Council in the current uncertain time.

The gross revenue budget for 2019/20 was £398m and the net budget was £121m.  The revenue outturn position was within budget with a final net underspend of £0.146m (which was equivalent to only -0.12% of net budget) after the proposed transfers to reserves and balances had been made.  This position had been achieved after delivering £6.1m of budget savings in 2019/20, on top of the £117m made in the previous 10 years giving a total of £123m - equivalent to around £1,500pa for every home in the Borough.

The funding outlook for the medium term was very uncertain. The Government had confirmed that, due to the Covid-19 pandemic, the planned review of local government finance system would not be implemented.  However, there had been no confirmation of the funding levels for 2021/22, and it was anticipated that the Council would need to identify £4.6m savings in 2020/21 and around £18.4m of further savings in 2021/22 and 2022/23.

The key areas of pressures during 2019/20 were noted. It was reported that:

• Children’s Safeguarding & Early Help ended the year with a service overspend of £3.7m.  Spend during the year was higher than the budget as there was an increasing number of more expensive specialist placements for looked after children with complex and severe behavioural or emotional health needs over the course of the year.   The Council had invested additional funding of £4.958m into the Children’s Safeguarding & Family Support budget over the next year highlighting the very high priority placed by the Council on safeguarding children.  A cost improvement plan was in place which was monitored on a regular basis by senior managers and Cabinet Members.

• Adult Social Care ended the year with a service overspend of £2.6m.  As reported throughout the year, the cost of purchasing care packages from external providers and high demand led to a pressure of £4.9m.  This was mitigated by additional income totalling £1.7m from CCG funding and client contributions.  As part of the 2020/21 budget strategy, the Council had committed additional investment totalling £3.926m into the Adult Social Care budget over the next three years.  The Service also had a Cost Improvement Plan in place to deliver better outcomes and efficiencies

The Capital Outturn position 2019/20 was noted; capital spend ended the year at £41.84m against an approved estimate of £53.17m which was largely due to re-phasing expenditure into 2020/21.

The income monitoring position was noted; overall cash collection was behind the targets set for Council Tax, Business Rates and Sales Ledger. The Covid-19 pandemic had impacted on some taxpayers ability to pay in March 2020, which would continue into 2020/21. Ultimately, all debt would be pursued and collected at the end of the financial year with appropriate recovery avenues pursued at appropriate times.

It was noted that 2019/20 was the fifth year of operation for NuPlace Ltd, the Council’s wholly owned housing investment company.  NuPlace was a separate legal entity and as such prepared its own accounts but as NuPlace was wholly owned by the Council, consolidated group accounts were also prepared.  The unaudited accounts showed that NuPlace had generated an operating profit before taxation of £0.573m in 2019/20 but as expected no dividend was distributed.  The Council also received income from NuPlace totalling £1.2m during 2019/20 net of additional interest and other marginal costs.

It was reported that the draft formal statement of accounts would be considered at the Audit committee in mid-June 2020 and would be audited by Grant Thornton, the Council’s external auditors, during June and July, the accounts would also be available for public inspection for 30 working days following this.  Summaries of the outturn on revenue and capital along with major variations were shown as appendices to the report. 

Cabinet Members welcomed the efforts made by officers and the local community during the current pandemic. A discussion was held regarding Adult Social Care and Cabinet Members stated that further funding was required from government for this essential service area. 

RESOLVED to RECOMMEND to COUNCIL that –

(a)  the Revenue outturn position for 2019/20 and related virements in Appendix 3 of the report which is subject to audit by the Council’s external auditors be approved;

(b)  the transfers to reserves and associated approval to the relevant Assistant Directors to spend the reserves detailed in section 5 of the report be approved;

(c)  the Capital outturn position and related supplementary estimates, re-phasing and virements shown in Appendix 4 of the report and as summarised in the report be approved; 

(d)  that delegated authority be granted to the Director: Finance & HR to make any changes required as the outturn is finalised (including the calculation of section 31 grants), in consultation with the Cabinet Member for Council Finance and Governance;

(e)  the performance against income targets be noted; and

(f)   the 2020/21 Public Health Grant be approved and the 2020/21 budget strategy be updated accordingly