Agenda item

To consider Report No. FIN2113 (copy attached), which sets out the outturn position on the General Fund revenue budget for 2020/21.

The Cabinet considered Report No. FIN2113, which set out the General Fund revenue budget outturn position for 2020/21.

It was reported that Members had received regular updates on the financial impact on the Council through the budget monitoring reports to the Cabinet. Members were advised that the outturn position set out might be adjusted as a result of the audit of the financial statements. The Cabinet was informed that, rather than providing a detailed analysis of the outturn position, the Report had set out material variations across the General Fund revenue budget, with consideration of the impact on the Council’s financial position in future years.

The Executive Head of Finance advised the Cabinet on the complex position regarding Business Rates and outlined the impact the accounting treatment of the various elements of the Business Rates position had had on the outturn and the Stability and Resilience Reserve.  The Executive Head of Finance outlined how Business Rates had been impacted by Covid. The Council had estimated in January, 2020 that around £50 million of Business Rates would be billed for and collected during 2020/21.  As a result of the coronavirus pandemic, the Government had supported businesses with a number of additional reliefs.  In total, £23.5 million of additional business rates relief had been provided to support local businesses. It was reported that there was a timing difference in how these changes had been accounted for through the Collection Fund.

Members were advised that there were a number of timing differences to work through over the following weeks and that CIPFA’s Financial Advisory Network had been engaged to provide an external assessment of the Collection Fund accounting. The Executive Head of Finance would review the report that had been received from the Financial Advisory Network and would work through the accounting and financial issues.

It was stressed that the Council would need to ensure that the next update of the Medium Term Financial Strategy would take into account the longer-term impact of the business rates outturn, given the adverse material variation of £1.171 million shown in Table 2 of the Report. Table 6 of the Report showed a transfer of £10.812 million to the COVID BRR Earmarked Reserve in accordance with year end accounting guidance.  This would ensure that the Council would have funding available to support its share of the Business Rates Collection Fund deficit and any repayment of Section 31 Grant over the following two financial years.

The Cabinet RESOLVED that

(i)           the General Fund revenue budget outturn position for 2020/21, as set out in Report No. FIN2113, be noted;

(ii)          the position in relation to Business Rates, as set out in paragraphs 4.8 to 4.11 of the Report and the opportunity to review the accounting treatment of this, as set out in paragraph 4.12, be noted, with the financial implications of any change in treatment being reported to the Cabinet in the regular financial reports;

(iii)         the budget carry forward requests from 2020/21 into 2021/22, as set out in Table 3 of the Report, be approved; and

(iv)         the transfers to earmarked reserves, as set out in Table 6 of the Report, be approved.