PURPOSE OF REPORT

To present the projected revenue and capital expenditure position, as at 30 September 2020.

EXECUTIVE SUMMARY

The Authority approved a revenue budget of £35.9m at its meeting on 16 December 2019. The forecast outturn position remains that the Authority will achieve a breakeven against this budget.

The Authority approved a capital budget of £4.1m on 16 December 2019. Due to the restrictions faced by the Covid 19 pandemic, this has been reviewed and revised to £1.0m.

RECOMMENDATIONS

Members are asked to:

(i) note the draft revenue and capital outturn positions as detailed within the report; and

(ii) approve the budget realignment request.

OBSERVATIONS FROM EXECUTIVE PANEL/AUDIT COMMITTEE

This report has not previously been considered by members.

BACKGROUND

This report provides information on the draft revenue and capital expenditure outturn position for the 2020/21 financial year.

Information

REVENUE BUDGET

The table below sets out the draft revenue outturn position for the 2020/21 financial year. This details a breakeven position against the budget of £35.942m.

Employee Costs

For the 2020/21 financial year, the budget for expenditure relating to employees is £27.18m which represents 76% of gross expenditure. The draft outturn forecast is an underspend position of £0.79m. This is due to a significant number of vacancies within firefighter and business fire safety apprentices, retained firefighters and other support roles. Due to the Covid 19 pandemic it has not been possible to progress the recruitment although these posts remain critical to achieving the Authority’s objectives.

The budget setting process included an assumption that pay awards would be 2% for all staff. The pay awards were finalised during August and September and were agreed at 2.75% for LGPS staff (green book) and 2% for firefighting (grey book) staff. For 2020/21 it has been possible to meet the additional costs from in year vacancy savings.

Premises

The budget for premises is £2.46m and an overspend of £0.27m is projected. The projected overspend includes a charge for business rates arising from a backdated valuation amendment and costs relating to the Covid 19 pandemic expenditure for buildings.

Transport

The projected expenditure for transport related costs is £1.0m which is broadly in line with the budget. In year expenditure includes additional costs arising from legislative requirements relating to the replacement of tyres and also costs arising from adjustments necessary to ensure continuity of service during the Covid 19 pandemic.

Supplies

The projected expenditure on supplies amounts to £5.89m which is an overspend of £0.87m against budget. This includes increased costs in relation to computer licences and maintenance, as well as increased costs in relation to transformation projects including agile working and higher levels of personal protection equipment as a result of the Covid 19 pandemic.

Capital Financing

The capital financing budget is £2.84m. The capital financing costs include the charge to revenue for depreciation and also the cost of borrowing. There is an anticipated underspend of £0.18m which reflects the reductions in the 2019/20 and 2020/21 capital programmes. This forecast anticipates that interest rates will remain at their current level.

Income

The income budget is £2.57m, of which £2.21m relates to grant funding. Anticipated income (excluding grants) is £0.41m, of which £0.17m relates to the Local Resilience Forum.

Revenue Grant Funding

A breakdown of grant funding, for 2020/21, is detailed below.

Revised Revenue Budget

During the course of the year it has been necessary to review the allocation of the budget across the income and expenditure headings. The table below provides details of the original and revised budgets. It is anticipated that further amendments will be required during the financial year to reflect the ongoing challenges arising from the Covid 19 pandemic.

CAPITAL PROGRAMME

The Authority approved a capital programme of £4.09m. Due to the Covid 19 pandemic, it has been necessary to review and revise the capital programme to reflect projects which can be delivered in year.

The provisional outturn for the capital programme is £1.0m.

Since the programme was revised, projects in relation to building works and fire appliances have been delayed due to the Covid 19 pandemic.

Some ICT schemes have been delayed due to the reprioritisation of the work of the ICT team to manage the transition to remote working. Other schemes are under review and are not expected to incur capital costs in 2020/21.

It is anticipated that the deferred schemes will be completed in 2021/22.

IMPLICATIONS