Issue - meetings

Use of General and Earmarked Reserves 2021/2022

Meeting: 07/03/2022 - Joint Scrutiny Committee (Budget Monitoring) (Item 9)

9 Use of General and Earmarked Reserves 2021/2022 pdf icon PDF 550 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 Resources presented the report which provided the forecast reserves position for 2021/2022 as at Quarter 3 (31 December 2021). 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, 2022.

 

The general reserve opening balance of £7.553m represents 5.72% of net revenue expenditure, which was above the 4% target level of £5.284m. Table 1 at Section 6.1.3 showed the forecast position for the general reserve at year end 2021/2022 to be an increase of £4.849m, to £12.402m. This balance represented 9.39% of net revenue expenditure, £7.118m above the 4% target level of £5.284m, indicating further progress towards strengthening the financial resilience of the Council and providing a buffer to deal with unexpected future issues.

 

The Committee AGREED to recommend that the report be accepted and Members:

 

·        Consider the impact of the £4.649m favourable variance for 2021/2022 would have on the budgeted contribution to the General Reserve;

·        Note the forecast increase of the General Reserve in 2021/2022 to £12.402m, being 9.39% of net revenue expenditure, above the 4% target level;

·        Consider the need for ongoing prudent financial management to support the Medium Term Financial Strategy and the financial resilience of the Council; and

·        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.