Agenda item

The Committee considered a report regarding the Council’s 2020/21 budget position at the end of March 2021.

After taking account of the £920,000 budget gap (confirmed by the Grant Thornton review) the General Fund revenue outturn was a £885,000 surplus, transfers of which to various reserves were recommended. The report advised that, for 2020/21, the £920,000 gap had been mitigated by in-year underspends across all services. Further mitigation measures were outlined for subsequent years, i.e.:

·      2021/22 – funding the gap from reserves. An application to the Secretary of State to allow the use of capital receipts to replenish reserves was in progress. If permission was not granted, the temporary use of reserves would become permanent.

·      2022/23 – the gap has been taken into account when determining the level of savings that would be required.  Assuming that all the £1.2m of savings are delivered and because they are of a permanent nature, the gap would be permanently closed in 2022/23.  

Capital expenditure of £11.2 million had been incurred against the combined General Fund and HRA capital programme budget of £15.7 million. After allowing for a £200,000 underspend, slippage of £4.3 million was recommended (£2.5 million to 2021/22 and £1.8 million to 2022/23). The report confirmed that improvements to the governance, monitoring and reporting of the capital programme would be undertaken as part of the finance transformation programme.

The Housing Revenue Account had achieved a surplus of £1,356,300 against the budgeted figure of £1,037,800 (a positive variance of £318,000).

The report also advised that a fundamental review of the Council’s financial management and reporting arrangements was being undertaken by an independent external advisor (Laura Rowley BA MBA FCPFA). Laura Rowley’s interim report was included within the agenda pack. This concluded that the Chief Finance Officer could proceed with a reasonable degree of confidence and that the data underlying the outturn report could be used to support the production of the 2022/23 draft budget. Laura Rowley joined the meeting via Zoom and confirmed her findings.

In response to Members’ questions, the Chief Finance Officer explained:

• that the finance transformation project sought to ensure that, in future years, outturn positions would be predicted more accurately and that significant variations could be identified and tracked earlier in the financial year

• the overspend on Minimum Revenue Provision - the budgeted amount had not taken account of the need to apply MRP to internal (as well as external) borrowing.

The sentence in Laura Rowley’s report which stated that Tandridge had approached Surrey County Council for assistance was questioned. This was on the basis that Tandridge had, in fact, originally interviewed two candidates for the Chief Finance Officer vacancy in 2020, one of which was Anna D’Alessandro who was duly appointed and proceeded to lead the joint working with the County Council. Laura Rowley confirmed that she would amend her report accordingly.

COMMITTEE DECISIONS

(under powers delegated to the Committee)

          R E S O L V E D – that

A.     the Council’s revenue and capital positions for the year be noted;

B.     the gap mitigation strategy regarding the request for capitalisation dispensation for 2022/23 be noted; and

C.   the independent review of the Council’s financial management and reporting arrangements be noted.

COUNCIL DECISIONS

(subject to ratification by Council)

          R E C O M M E N D E D– that

A.    the following transfers to reserves from the outturn position be approved:

(i)      £682,000 planning reserve to support the delivery of the Local Plan and other general planning related activities (including £130,000 Homes England money)

(ii)     £134,000 reserve to mitigate future financial uncertainties /risks in the medium-term and support budget planning

(iii)   £42,000 Academy/Northgate Reserve to support the delivery of the new revenues & benefits system in 2021/22

(iv)      £27,000 CV-19 reserve to support future CV-19 related spend

B.    capital carry forwards of £4.3 million from 2020/21 to future years (£2.5 million to 2021/22 and £1.8 million 2022/23) be approved.