Council Adapts To Financially Challenging Times

Members of the Council’s Finance, Procurement and Transformation Committee have received a report today (21 June) which states that the ongoing impact of Covid-19 restrictions and the related response and recovery measures has remained a key area of focus for financial monitoring throughout the financial year, alongside the ongoing overview of non-Covid-19 related issues, such as inflationary pressures.

Committee Members will be asked to:

• note that all Services have maintained spending within agreed budget levels.
• note that Unallocated General Fund Balances as at 31 March 2022 have been increased to £8.1 Million, equating to 2% of the annual planned expenditure, in line with the agreed corporate policy and budget principles agreed by Full Council.
• note that there are currently unallocated resources of £11.671 Million available within Reserves and that the utilisation of these resources will be subject to further Member consideration as part of the development of the Medium Term Financial Strategy and Council Plan;
• note the amounts held by the Council in a number of funds for specific projects and commitments, including those associated with the COVID 19 response.
• agree that a review is undertaken of amounts held within Committed Reserves and Service Reserves with a view to releasing amounts for further Member consideration.

Despite the recent COVID-19 pandemic and the pressures this caused on Council budgets and services, all Services have maintained spending within their agreed budgeted levels at the end of the financial year.

Where services have underspent against their agreed budget levels, the Council’s Budget Flexibility Scheme makes provision for these underspent amounts to be transferred to Service Reserves, within agreed parameters and with member approval.

As anticipated, and previously reported, the financial implications of COVID-19 in 2021/22 were materially lower than those incurred in 2020/21 and were primarily associated with the loss of budgeted income, particularly within Leisure & Sport.

Previous reports have highlighted a potential increase in energy costs based on increased ventilation requirements, primarily within the schools estate. However, energy costs have been contained within agreed budget levels as the Council’s total energy consumption levels for 2021/22 remained lower than pre-pandemic levels, with the increased consumption levels within Schools being wholly offset through a decrease in consumption across the non-school’s estate. The forward purchasing of energy at a national level has protected the Council from increased energy unit prices in 2021/22, although these increases will impact on energy costs going forward. A detailed review of estimated energy consumption levels for 2022/23, and the financial impact of increased Energy unit prices, is currently being carried out.

Chair of Finance, Procurement and Transformation Committee, Carolyne Wilson said: “Our Council faces exceptional challenges, including further reductions in Scottish Government support. The pandemic has added to our already existing financial challenges, but though prudent measures we will face the ongoing inflationary pressures and manage our revenue accordingly.”

Vice Chair, Dougie Campbell said: “The cost of living crisis is hitting us all hard, and our Council will need to adapt and save in order to meet our future financial challenges. Services may need to alter, work practices may change, but citizens can rest assured that we will make best use of the funding available to us and be practical and shrewd in our financial planning.”