Agenda and minutes
Contact: Alan Garside/Jodie Kloss Email: email@example.com
Apologies for absence
There were no apologies for absence.
Disclosure of interests
There were no disclosures of interest.
The minutes of the meeting held on 23 November 2020 to be agreed. The minutes will be signed when members and officers return to the Town Hall.
The minutes of the meeting of Finance Scrutiny Committee held on 23 November 2020 were approved. They would be signed at a later date.
Report of the Head of Finance
The committee received a report of the Finance Manager- Financial Planning and Analysis with the financial position at the end of November 2020.
The Director of Finance introduced the report. A variance was forecast of £0.194 million in the revenue budget after accounting for additional government support and the income guarantee scheme for the impact of Covid 19.
A significant variance was anticipated in the capital budget, this was largely due to changes to how the multi-storey car park at the Riverwell site would be delivered. There were also changes to the phasing of schemes at Riverwell and Hart Homes.
An analysis of the position in relation to the impact of Covid 19, as requested at the last committee meeting, was included at the end of the report. A full response was also appended to the minutes. The key points were that £1.526 million had been received in grant funding as well as funding through the income guarantee scheme for 75% of losses. For 2021/22 the Government would provide additional funding of £0.471 million and would extend the income guarantee scheme into the first quarter. The council had undertaken significant work to mitigate the impact of Covid 19 on residents. To date, £20.5 million had been paid out to local businesses as a result of various grant schemes.
It was projected that the budget would move back into surplus during the Medium Term Financial Strategy period. The reserves remained at prudent levels. Commercial income had held up better than forecast with rent collections in line with normal expectations.
Following a question, it was confirmed that grant funding received from the government was a general grant to support costs and did not have to be used for any particular expenditure. There had also been some cost savings as the Big Events had not taken place which had mitigated some of the impact of Covid 19.
Discussing the noteworthy significant variances, it was reported that over £1 million had been provided to support SLM and the leisure contract. There had also been loss of parking income and a reduction in income from the county council due to increased recycling levels under the Alternative Funding Model which would continue into next year. Additional income had been received following rent reviews. Changes to the capital programme had also resulted in lower borrowing costs.
the 2020/21 Period 8 Finance Digest, as shown in Annex A, was
considered and both the revenue and capital forecast outturn
positions were noted.
Report of the Head of Finance
The committee received a report of the Director of Finance with details of service level expenditure, funding and council tax levels for the medium term 2021/22 to 2023/24, including the use of reserves and the 2021/22 Council Tax calculations.
The Director of Finance introduced the report and noted that the updated version of the papers was on the website. The key points to note, beyond those highlighted in the Finance Digest, were that overall there was a budget gap of £0.477 million, there had been savings in borrowing costs and the Demand Responsive Transport underspend was carried forward. There were also minor changes including to business rates, staff costs, changes in savings from the Watford 2020 programme and realignment of budgets.
The £0.471 million grant from the government would be incorporated into the renewal fund for Covid support or recovery, as appropriate. Covid 19 had also had a significant impact on the council tax base which had seen a reduction for the first time due to the number of council tax support payments and an increase in single person discounts. While there would be some government support in 2021/22, and potentially beyond, to reflect this, it was anticipated that levels would take some time to normalise, in part due to delays experienced in some forthcoming developments.
The reserves were in a sustainable position with a lower use of reserves than planned.
The budget gap to be funded from reserves was £0.477 million over three years.
While there was not a significant change in expenditure in the coming year, it was noted that there was further investment planned in the capital programme for Market Street, Queens Road and St Albans Road.
Responding to a question about car park charges, officers advised that further losses were anticipated in quarter 1 of 2021/22 to be covered by income guarantee scheme which was considered the most reliable basis for the budget in this regard. Additionally the extension to CPZ vouchers and the suspension of other parking fees had been accounted for in next year’s income.
It was noted that the Labour group intended to provide a fuller response to budget proposals at the meeting of Full Council on 26 January 2021.
1. that the budget (Attachment 1) as laid out in the report, including:
· the base budget for 2021/22
· the Capital Investment Programme 2020-24
that the schedule of fees and charges and the income
charging policy (Attachment 2) were considered.
3. that the capital strategy for 2021/22, including the Treasury Management policy (Attachment 3) were considered.
4. that the advice provided by the Director of Finance on the robustness of estimates and the adequacy of reserves was noted.
5. that the indicative budgets for 2022/23 and 2023/24 were noted.
6. That the comments of Finance Scrutiny Committee be forwarded to Cabinet.