Issue - meetings

Performance and Financial Management Quarter 2 of 2020/21

Meeting: 25/11/2020 - Council (Item 173)

173 Performance and Financial Management Quarter 2 of 2020/21 pdf icon PDF 289 KB

Report by Head of Resources to the Strategy and Resources Committee on 2 November 2020 (attached). 


Additional documents:


Council considered the Performance and Financial Management report Quarter 2 2020/21 to the Strategy and Resources Committee on 2 November 2020 (circulated previously).

Meeting: 02/11/2020 - Strategy and Resources Committee (Item 205)

205 Performance and Financial Management Quarter 2 of 2020/21 pdf icon PDF 289 KB

Report by Head of Resources (attached).

Additional documents:


 The Committee considered a report by the Head of Resources (circulated previously) regarding the Performance and Financial Management for quarter 2 of 2020/21.


The Accountancy Services Manager highlighted the following:


·       The revenue budget for 2020/21 was approved at Council on 26th February 2020 at £13,380,000.

·       As at 30 September 2020, the latest forecast net budget is £13,516,000, which produced a forecast budget deficit of £136,000. (Q1 deficit was £385,000).  Details of all variances were shown in “Appendix A – Variations in the Revenue Budget”.

·       The original budget for 2020/21 included a forecast to achieve £200,000 worth of salary vacancy savings.  The current position forecasts this will be exceeded this year; we were currently predicting to achieve £245,000.

·       There was much pressure on the 2020/21 budget due to the Covid-19 pandemic and the Council’s income streams have been greatly affected in the first two quarters of 2020/21 and this was expected to continue through the financial year.  Also additional costs have been incurred by the council in provision of temporary accommodation, additional agency staff for waste and recycling and in supporting the local community.

·       Central government have announced and paid local authorities three tranches of support funding totalling £1,189,000 for North Devon.  We have also claimed £160,000 in respect of the job retention scheme and received £170,000 New Burdens grant for SBG and RHLG.  Central government have announced they will help support local authorities for lost income by paying 75% of any lost income after Councils incur the first 5% variance.  The expected lost income and additional costs have been factored into the figures in Appendix A along with the anticipated government support.  Figures relating to the forthcoming national lockdown would be worked on this week.

·       It was anticipated that there would be a reduction in both Council Tax and Business Rates income during 2020/21 as a result of the pandemic.  However, no reduction for income was being reported for 2020/21 year as the financial effect of any deficit on the Collection Fund income will not have an impact on NDC finances until later years as the Government also announced that deficits on this taxation income can be spread over the next 3 financial years.

·       It was difficult to quantify the full impact of Covid-19 at this stage with any certainty, however the financial pressure on the Council would be substantial through 2020-21 and beyond – even after taking into account the above mentioned emergency Covid-19 funding announced by the Government.  The Council does have both general fund and earmarked reserve balances which it could call upon in 2020-21 to mitigate the economic impact being experienced but clearly this would have much longer term solvency implications for the authority.

·       “Appendix B – Movement in reserves and Balances” detailed the movements to and from earmarked reserves in 2020/21.

·       Full details of the Strategic Contingency Reserve movements and commitments are attached as “Appendix C – Strategic Contingency Reserve”.

·       The 2020/21 to 2022/23 Capital Programme is attached as “Appendix D – Capital Programme”.  ...  view the full minutes text for item 205