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Agenda item
Financial Monitoring Quarterly Reports for 2020/21 – Quarter 3
Minutes:
The Chief Accountant presented a summary of the interim outturn position for services at the end of December 2020 (excluding capital financing charges and recharges).
This report is based on figures from quarter 3 (1 October to 31 December). Since then a budget has been set and figures have been revised. In future the Overview and Scrutiny meetings shall aim to be more aligned with updated figure.
Some of the large variances are as a direct result of COVID-19. The Chief Accountant highlighted to the councillors that main income streams have been impacted including car parking and the cliff railways. Homelessness and temporary accommodation costs are the largest overspend in the report.
The pandemic may continue to impact the budget in the next financial year, depending on the situation. There is hope that easing the restrictions and opening the town to tourism later this year would boost the local economy and improve the income.
The Chair thanked the Chief Accountant for the report and for the layout of the report being put into separate service areas. This had made the report more accessible.
The councillors discussed overspends and underspends. It pointed out that there appears to be no vast underspends which is a positive. The Chief Accountant informed the committee the large overspend was due to temporary accommodation the finance department are working closely with the housing department and the director of housing to identify future options, using external professional advice if and where appropriate.
There are currently over 230 families/individuals in temporary accommodation. The town needs a large amount of affordable housing. To drive down the rental market, around 400 new homes a year is needed. The average price of rent went up 40% in the last few years what makes the prices unaffordable for a large proportion of residents.
There was a surge of applications for accommodation last year. The government grants to cover temporary accommodation during the pandemic are much appreciated, but the best long-term solution for the town is building sustainable accommodation and secure long-term tenancies. The council is aiming to buy and build new properties to reduce the costs of temporary accommodation in the future. The Councillors agreed that the process would take time and generate costs.
Councillors commented that 2021 was always going to be forecast as a deficit year and asked about the increase to this. The Chief Accountant agreed that a larger deficit was forecast and that the figures in the report are in addition to any deficit we had. COVID-19 has impacted our income streams, not foreseen and that has added to complications. Capital schemes have had to have been put on hold. COVID-19 has impacted across the board on all forecasts. The rental income forecast is to try to recover any loss income and not write off any income or any deferral where necessary and can be impacted by the slowdown of the general economy.
The Managing Director informed the councillors that that some savings that had been planned had to be paused due to staffing the COVID-19 pandemic.
The councillors asked about the cliff railway shortfall. The Chief Accountant explained that though one of the railways was due to have maintenance. The cliff railways support the revenue budget and having them closed is lost income.
The Chair asked if the DSO (Direct Services Organisation) waste service underspend means that it has been value for money. The figures for the full financial year of work in the normal circumstances are needed to accurately evaluate the cost of the service and see if the change generated savings.
The Chair thanked the Chief Accountant for the report and his contribution.
RESOLVED (unanimously)
To accept the contents of the report, and the actions within the conclusion and management action section.
Reasons for recommendations
To assist the council in understanding the financial position and particularly areas of over and under spend. This assists in identifying areas for review in the revised 2020/21 budget and the production of the 2021/22 budget.
Supporting documents:
- 2020-21 Q3 Financial Monitoring Report, item 72. PDF 217 KB
- QTR 3 Ops combined App 1, item 72. PDF 34 KB
- QTR 3 Corporate App1, item 72. PDF 17 KB
- Appendix 2 - Capital Q3, item 72. PDF 45 KB
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