Agenda item

The Committee had before it a report by the Director of Resources, which provided the financial position of the Council as at Quarter 2 (30 September 2020) and the full year forecast position for the financial year 2020/21, including:-

·       General Fund and Housing Revenue Account (HRA) and capital accounts; and

·       Associated Balance Sheet; and Common Good revenue account and Balance Sheet.

The report recommended:-

that the Committee –

(a)      note the positive cash position that has been achieved for the General Fund and HRA to the end of Quarter 2 as detailed in Appendix 1;

(b)      note the Common Good financial performance to the end of Quarter 2 as detailed in Appendix 3;

(c)      consider the General Fund position and agree on the actions to be taken to address the projected deficit as detailed in Appendix 2, making reference to the options available at paragraph 3.27, and lack of clarity on the value of income that may be receivable through the Income Loss Scheme;

(d)      note that the revenue budget for the HRA is on target to achieve the approved budget, making a contribution to HRA reserves for 2020/21 as detailed in Appendix 2;

(e)      note that the budget for the Common Good will be exceeded following additional contributions approved by the Urgent Business Committees on 6 May and 30 June 2020. Noting that cash balances forecast for the year remain in line with recommended levels, detailed in Appendix 2; and

(f)       note that the capital expenditure for the General Fund will be lower than budgeted as a result of capital works being closed over the lockdown period of the Covid -19 pandemic. This will result in project budgets being carried forward into 2021/22; and it is estimated that expenditure on the Housing Capital programme will also be lower than budget also due to sites being closed, as detailed in Appendix 2.

The Committee resolved:-

(i)              to approve recommendations (a), (b), (d), (e) and (f);

(ii)            to note paragraphs 3.23, 3.24 and 3.25 of the report, agreeing that Aberdeen City has to date received a smaller proportion of the distributed funding than it has identified it needs. There should be fairness in the distribution of funds, so in the event that the full financial impact of the pandemic is not funded by Scottish Government, each council receives the same proportion of their losses, rather than creating an environment of winners and losers. The development of the income loss scheme adds more complexity and with the situational changes and fluid nature of the forecasts, as exemplified in the report, mean that an overall position for councils will not actually be known until the end of the financial year. But that is too late. Therefore, instruct the Chief Officer - Finance to bring forward and set out as part of his quarter 3 report the opinions detailed at 3.26 of the report in order for the council to close the deficit, thus allowing the Committee to determine its preferred option or options at that time; and

(iii)           to thank all officers who contributed to the current budgetary position and those who prepared the report.