Financial Management Report
The Committee is asked to consider the Financial Management Report Quarter 3 – 2020/21.
The Leader and Cabinet Member for Finance and the Chief Financial Officer have been invited to attend the meeting for this item.
The Leader and Cabinet Member for Finance introduced the report which set out the revenue and capital project outturn position for Quarter 3 2020/21 as at the end of December 2020 and was considered by Cabinet on 17 March 2021.
The Leader and Cabinet Member for Finance said that the projected overspend had increased by £449k. He highlighted the loss of income in leisure centres and car parking, and the savings to members’ allowances in Table 1. Table 2 illustrated the overall impact and the Leader and Cabinet Member for Finance drew attention to the overspend of £2.25m in the Commissioning, Environment & Leisure service budget. He highlighted Government funding received in Table 5 and said effective negotiation had resulted in a £535,597 payment for loss of income to Swale Community Leisure (SCL), lower than expected. The Leader and Cabinet Member for Finance drew Members’ attention to the £250k loss in planning fees as a result of the Covid-19 pandemic.
Finally, the Leader and Cabinet Member for Finance said whilst the Council faced financial challenges, with government funding and effective internal financial management, it had not stretched the sustainable revenue budget and compared favourably with other local authorities.
The Chairman praised the Chief Financial Officer and his team for the prompt payment of invoices which was very important to businesses during the current Covid-19 pandemic.
Referring to paragraph 3.12 on page 11 of the report, a Member sought clarification on the percentage of reduction in income from Council Tax collection which was offset by Government grants. The Chief Financial Officer agreed to find out.
In response to a Member’s question on the SCL contract, the Leader and Cabinet Member for Finance said there was still over 4 years left on the contract. In the debate that followed, the Chief Financial Officer agreed to provide the Chairman with additional information on the negotiations with SCL. In response to a Member’s question on the £340k funding received from the National Leisure Recovery Fund the Chief Financial Officer advised that £72k was allocated to Faversham Pools.
The Chairman went through Appendix 1 page by page and Members asked questions and made points on Table 8 which included:
· Explanation on the net underspend on Electoral Registration (page 15);
· clarification on the Rough Sleeper Initiative (Page 16);
· clarification on whether the £27k overspend on Conservation (page 17) included the funding from the Area Committee allocation; and
· was there an update on the Barton Hill appeal costs (page 17)?;
The Chief Executive explained that the Electoral Registration underspend was due to the postponement of the process during lockdown. She explained the Rough Sleeper Initiative. The Chief Financial Officer agreed to find out more information on the £27k Conservation overspend. The Leader said the Barton Hill Drive high court challenge had not yet been settled.
On Table 10, Members raised points including:
· The Milton Creek Access Road scheme description was confusing and required updating (page 24);
· clarification and update on Swallows Leisure Centre Roof – internal/external and whether it was insured (page 25);
· were there any plans to demolish publish toilets at The Forum, Sittingbourne?; and
· why were repairs and renewals costing (£30k) required to the new CCTV system?.
The Chief Financial Officer advised that previous information had been circulated to Members on the Milton Creek Access Road as it was complicated, and he agreed to update the wording. He explained that all SBC-owned buildings were suitably insured but the insurance company were not liable for repairs as buildings needed to be maintained. The Leader said there were no plans to demolish the amenities at The Forum. The Chief Financial Officer agreed to report back on the costs for the new CCTV system.
The Chairman thanked the Leader and Cabinet Member for Finance and the Chief Financial Officer.
(1) That the total projected revenue overspend of £3,768,000 (£3,319,000 as at end of September 2020) be noted.
(2) That the use of reserve funds as set out in paragraph 3.17 be noted.
(3) That the capital expenditure of £7,540,490 as detailed in paragraph 3.19 and Table 10 in Appendix 1 of the report be noted.
(4) That the additional Government funding received by the Council in response to the Covid-19 pandemic be noted.
(5) That a further payment to Swale Community Leisure of £535,597 to reflect leisure centre contractual commitments arising from the Covid-19 pandemic as detailed in paragraphs 3.15 and 3.16 of the report be noted.