Decision details

Budget monitoring No.2, 2020-21

Decision Maker: Cabinet

Decision status: Recommendations Approved

Is Key decision?: No

Is subject to call in?: Yes

Purpose:

Cabinet considered a report providing a 2020-21 budget monitoring updated for General Fund revenue and capital, reflecting the latest forecasts in light of Covid-19.

Decision:

Cabinet agreed the following:

 

1.  To approve the transfer of £200k of the Covid Shortfall Reserve to the Equalisation Reserve (see paragraph 3.4 of the cabinet report);

 

2.  To the updated General Fund capital programme as set out in Section 4 and Annex 1 to the report.

Reasons for the decision:

The previous report to Cabinet suggested the overall projected shortfall amounted to £3m, comprising £5.6m losses less Government funding of £2.6m. It was then agreed that this will need to be funded from reserves.

 

Some £1.6m of the £3m reserves identified to fund the estimated net overspend was found from the Equalisation Reserve, which accommodates fluctuations in Council Tax and Business Rates. 

 

As part of the budget strategy for next year, some £200k has been identified as required to ease the pressure on this reserve, given the challenges of collecting Council Tax and Business Rates next year. This would have the effect of using some of the Covid Shortfall reserve, which has benefited from the additional £1.1m of Government funding, to contribute to these losses by reducing the use of the Equalisation Reserve to £1.4m.

 

Overview and approval of the updated capital programme is required as part of robust financial management.

Alternative options considered:

Not to make the transfer, this was rejected because it would put further pressure on the 2021-22 budget.

Report author: Tim Willis

Publication date: 26/11/2020

Date of decision: 19/11/2020

Decided at meeting: 19/11/2020 - Cabinet

Effective from: 04/12/2020

Accompanying Documents: