Issue - meetings

In accordance with the Strategy & Resources Committee’s decision of 8th June 2021, Grant Thornton LLP UK had been commissioned to undertake a review following the discovery of a potential £920,000 budget gap in 2020/21. Grant Thornton had since completed its investigation and had made 15 recommendations for the Council to consider. Its report, presented by Thomas Foster, confirmed that:

“there was an unfunded revenue deficit of £920,500 within the 2020/21 outturn position that was not detected during the year. The implications of this are that the Council’s outturn position is £920,500 less favourable than had been expected … It also appears that this error was not identified during the 2021/22 budget setting process and was therefore rolled forward as part of the baseline budget for 2021/22 that was approved by Council in February 2021. This means that its impact will continue to be relevant for the General Fund in each financial year until it is resolved.”

The deficit arose from a reduction in notional pension costs which should have been offset to zero without any budgetary affect. Grant Thornton’s report sets out the relevant chronology of events, together with key learning points and recommendations.

A short discussion took place regarding the investigation process and Grant Thornton’s findings.

The Chief Finance Officer presented her report in response to Grant Thornton’s findings, which confirmed that: 

·         all the recommendations proposed by Grant Thornton would be implemented as part of the ongoing Finance Transformation Programme;

·         there were some issues not covered by the limited scope of the Grant Thornton report that still needed to be reviewed;

·         a fundamental ‘root and branch’ review of the more fundamental areas of finance will be carried out as part of the Transformation programme;

·         a detailed review of all 2021/22 budget lines to ensure a correct starting position for future budget setting in 2022/23;

·         the team who is leading the Finance Transformation Programme has been commissioned to develop one plan which brings together transformation programme items, all of the Grant Thornton recommendations and all other related issues to give confidence and assurance to Members that:

o   a balanced budget can be set for 2022/23;

o   the 2020/21 outturn can be finalised and published; and

o   the 2020/21 Accounts can be finalised and signed off.

In response to Member questions it was confirmed that:

·         a skills and training requirements of the Finance team will be part of the new Target Operating Model (comprised as part of the Finance Transformation Programme);

·         despite the position of uncertainty, there is no reason to believe a Section 114 Notice would need to be issued.  If no other mitigation was available (to be determined through the 2021/22 budget review) the budget gap could be met out of Reserves;

·         other areas of concern still exist in respect of Council finances which were outside the scope of the Grant Thornton report.  The Chief Finance Officer stated that she would bring a report back to the Committee on 2 November which would set out the urgent activities finalise  ...  view the full minutes text for item 136