Agenda item

Peter Stuart, Head of Corporate Resources introduced the report.  He highlighted the comprehensive report as the pandemic has impacted the Council’s finances.  The report explains the details for the variances and the overspend of £1.4m to March 2021.  The end of year result was an improved position compared to the prediction in June 2020.  This was due to the action of officers, the assistance from Central Government for local authorities with grants and the receipt of £2.1m from the Income Compensation Scheme.  He noted the purchase of more temporary accommodation and investment in the Place and Connectivity Programme in Burgess Hill of £2.4m.

The sustainability of the Council in the longer term has improved as the General Reserves have been topped up by reviewing all reserves and returning funds where a  need has reduced or is no longer required.  He highlighted the return of reserves for leisure insurance, illegal incursions and Gatwick reserves.  He confirmed the use of General Reserves to finance last year’s budget and noted there is no forecast to use reserves for the 2021/22 budget.

The Deputy Leader welcomed the report, commended the results in the current circumstances and thanked the officers for the comprehensive report.  She queried the short-term future expenditure for Gatwick Airport. 

Judy Holmes, Assistant Chief Executive advised that a reserve is a best guess to what finance may be needed.  She noted it was normal for councils to work on a Development Consent Order (DCO) in partnership with other councils.  £41,000 has been retained in the reserve, a planning performance has been agreed with Gatwick Airport Liaison along with an agreement with funding.  With a DCO any applicant is expected to fund most the work that is required.  Other sources of funding will be available for 2021-22 and work continues.

The Cabinet Member for Economic Growth noted the investment to improve the footpaths in Burgess Hill which has been beneficial to the local residents.   He expressed concern over the Council’s investment in the Property Fund.  The Head of Corporate Resources advised he has discussed this matter regularly with the Deputy Leader.  The Local Authority Property Fund does a good job, has good assets and are not overly exposed to retail.  The return is currently 3% per annum, he commended them on their consistent performance and advised they are well placed to ride out the current unpredictable circumstances.

The Cabinet Member for Community highlighted the positive impact the airport has on employment and the local economy, the negative impact on the environment and the Council’s work to balance airport expansion. He asked for clarification on expenditure for Gatwick in relation to the Council’s total.  The Head of Corporate Resources advised it was 10% of net budget.

The Cabinet Member for Environment and Service Delivery thanked the officers for  the comprehensive report, welcomed the receipts from Hurst Farm which would be used to finance The Orchards Centre purchase.  He noted the many challenges of the pandemic and that some improvements on parks and open spaces had been delayed and would be completed in the current financial year.

The Leader thanked the members and noted that this was the first report to detail the considerable cost of the pandemic. He highlighted the cost of work to subsidise the leisure centres, advised that the majority of the council’s income is from sources other than Council Tax.  The strength of the council’s financial position allowed it to underwrite those costs, however this was not sustainable long term.  He hoped the figures would soon improve with the relaxation of restrictions and getting the council’s finances back on a more sustainable footing was important. Comparing the overspend to the Spring projections, the overspend is less than expected.  He took the Members to the recommendations (i) to (vii) which were agreed unanimously.

RESOLVED

That Cabinet noted the contents of this report, and recommended to Council:

(i) that grant income as set out in paragraph 12 to 19 of this report be transferred to Specific Reserves;

(ii) that requests totalling £108,000 be transferred to Specific Reserves as set out in Table 1;

(iii) that £100,000 be transferred to the Community Development Fund Specific Reserve from General Reserve as detailed in paragraph 21;

(iv) that balance of interest totalling £170,031 as set out in paragraph 22 is transferred to the General Reserve;

(v) that Dividend income totalling £8,529 as set out in paragraph 27 is transferred to the General Reserve;

(vi) that the 2021/22 capital programme be increased by £1,556,000 as a result of slippage of some 2020/21 capital projects as detailed in Table 2;

(vii) that the revenue overspend in 2020/21, totalling £1,400,000, be met from General Reserve.