Agenda item

Report of the Cabinet Member for Finance and Communities is attached.

Councillor Richard Gold, Cabinet Member for Finance and Communities, presented the report which set out the final financial position for the Council for 2021/22. The report sets out the position for both revenue and capital and provides an analysis of the variances, both under and overspending. On revenue, Members noted that the revenue budget underspent by £0.667m. This net underspend comprises individual departmental overspends and underspends. The largest individual departmental overspend was on Children and Young People, mainly on staff costs for social care and safeguarding, as well home to school transport. The most significant underspend was on non-specific services, driven by reduced capital financing costs and the return from investing in Manchester Airport. On capital, Members noted that there was a £45.736m outturn against a budget of £49.464m. This is after the 2021-22 budget was reprofiled, so that £57.734m budget was transferred into the 2022-23 financial year.

Members discussed the report, welcoming the underspend but querying the variance from budgeted expectations. Councillor Gold agreed and advised that this had been an unusual year and that budgets were monitored throughout the year to mitigate unforeseen surprises.

Decision:

Cabinet:

1.    Noted the 2021-22 final underspend on the revenue budget of £0.667m, against a budget of £171.9m. It should be noted that this budget, whilst mainly funded from Council Tax and Business Rates income, also included funding of £5.2m from earmarked reserves and a £7.732m contribution from General Fund Balances;

2.    Noted that a £2.5m additional contribution was made to the pooled fund in 2021-22. There will be a further additional contribution of £2m, which will be paid over in 2022-23, at which point all contributions will balance to the Section 75 agreement across the term;

3.    Noted the final position on the collection fund was a surplus on Council Tax and a deficit on Business Rates. The main cause of the Business Rates deficit was the granting of additional reliefs after the budget was set. These reliefs were granted by the Government to offset the impacts on businesses of the pandemic. The Council’s cost of the Business Rates deficit will mainly be met from compensatory Government grants;

4.    Noted the that the final position on reserves and balances is £114.035m at the end of 2021/22 (excluding schools balances and matched funds). The £114.035m is split between £70.743m general reserves and £43.287m earmarked reserves. The schools net reserve balance is (£12.627m) which is made up of £8.846m individual schools surplus balances less £21.473m deficit on the central Dedicated Schools Grant which is subject to a formal deficit recovery programme;

5.    Noted expenditure of £45.736m on capital programmes during the year; and

6.    Noted the capital spend of £45.736m against a budget of £49.464m. The resulting underspend of £3.728m, combined with funding adjustments of £0.656m, enables a carry forward into 2022/23 of £4.384m. This report includes the recommendation to approve a capital budget carry forward for £4.384m.

Reasons for the decision:

To note the final financial position for the Council for 2021/22.

Alternative options considered and rejected:

N/A