Financial Management Report: April – December 2020
The Leader and Cabinet Member for Finance introduced the report which set out the revenue and capital projected outturn position for 2020/21 as at the end of December 2020. He outlined the five recommendations in turn.
The Leader said that the projected overspend had gone up by £449,000, which he said was not surprising due to the impact on Swale during the autumn 2020. He drew attention to Table 1 which illustrated losses at the leisure centres and the car parking income. Table 2 illustrated the overall impact, particularly on the Commissioning, Environment and Leisure budget, which was an overspend of £2.25million, which included over £1 million for car park losses and £700,000 for leisure centres. The revised overspend was £3.768million, the total variance was £4.1 million, which had been forecast as the likely variance. The total projected variance from the effects of the pandemic was £4.4 million. The Leader added that the administration had avoided major ad-hoc demands on the revenue budget.
The Leader amended the recommendation to read ‘note’ rather than ‘agree’. He referred to the reserve funds set out in paragraph 3.17 and Table 9 in Appendix I of the report, which were predominantly Special Project Funded.
The Leader said that out of a budget of £13.978m for 2021, £7.540m had actually been spent, which included some significant improvements across the Borough. He also referred to the high cost of the repairs to the Swallows Leisure Centre roof, and the continued capital cost of the Sittingbourne Town Centre project, which he hoped would become more beneficial, for both income, and also to residents throughout the summer.
The Leader said the Council was in a sound position, with assistance from Government funding, as set-out in Table 5, at paragraph 3.5 in the report. He said that if at the end of the final quarter, the Council was in surplus, that this would be projected forwards to meet any future Covid-19 pandemic costs.
The Leader referred to the contract the Council had with the leisure centres in Swale. The Council was going to have to pay compensation, and the Leader thanked the Cabinet Member for Health and Wellbeing and officers on their negotiation skills.
The Cabinet Member for Health and Wellbeing outlined the contract the Council had with Swale Community Leisure and the claims for loss of income due to the pandemic. She gave credit to the Chief Executive for her part in reaching a financial agreement.
The Leader praised the work of the Chief Financial Officer, the Financial Services Manager and the Finance Team for the work they had completed during the pandemic.
(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 Appendix I 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 be authorised.