Issue - meetings

Use of General and Earmarked Reserves 2020/2021

Meeting: 23/11/2020 - Joint Scrutiny Committee (Budget Monitoring) (Item 8)

8 Use of General and Earmarked Reserves 2020/2021 pdf icon PDF 665 KB

To consider the report of the Chief Officer Resources.

Additional documents:

Minutes:

Consideration was given to report of the Chief Officer Resources.

 

The Chief Officer presented the report which provided the forecast reserves position for 2020/2021 as at Quarter 2 (30 September 2020).  Section 6 of the report provided an overall summary of the forecast financial position in relation to the balances in general and earmarked reserves at 31 March, 2021.

 

Table 1 at section 6.1.3 showed the forecast position for the general reserve at year-end 2020/2021 was a decrease of £0.048m, to £6.387m. This balance represented 4.72% of net revenue expenditure, which was £0.973m above the 4% target level of £5.414m.  This indicated further progress towards strengthening the financial resilience of the Council and providing a buffer to deal with unexpected future issues.

 

The Chief Officer reported that the forecast decrease in general reserves was a result of current forecast net portfolio overspends of £0.248m offset by an agreed budget contribution in 2020/21 of £0.200m to support medium term financial planning and strengthen the Council’s financial resilience.

 

Table 2 at 6.1.7 of the report showed the forecast level of earmarked reserves at 31 March, 2021 was £8.661m, an in-year increase of £0.956m, and further details of earmarked reserve movements was included in Appendix 1.

 

The Committee AGREED to recommend that the report be accepted and Members considered the use of general and earmarked reserves for 2020/21; and

 

·        Consider the impact of the £0.248m adverse variance for 2020/2021 would have on the budgeted contribution to the General Reserve;

·        Note the forecast decrease of the General Reserve in 2020/2021 to £6.387m, being 4.72% of net revenue expenditure (above the 4% target level);

·        Continue to challenge budget overspends and implement appropriate service Action Plans, where required.

 

Maintenance of general reserves at an adequate level is crucial to the Council being able to meet future liabilities arising from risks for which specific provision has not been made.