At the next Walsall Cabinet meeting on 16 June, members will consider current council finances and assess the pre-audit revenue and capital outturn position for 2020/21. Cabinet is expected to have an update on the financial impact of the council’s response to Covid-19 and what this will mean to the budget going forward. In respect of the capital programme, and following approval of carry forwards by Walsall Cabinet, the position is one of ‘break even’.
Cabinet will therefore assess the net revenue pre-audit outturn that currently stands at £127.12m against a budget of £127.57m, with a projected underspend variance of £453k.The pre-audit capital outturn therefore means that the council will carry forward £38.87m, with this money already earmarked for statutory services. Cabinet will also hear of the impact of Covid-19 and a significant loss of income following the closure of Walsall Council services and facilities. As the council refocused its resources in response to Covid-19, this had a significant impact on its operations and income – resulting in delays to the delivery of approved budget savings.
Councillor Mike Bird, Leader of Walsall Council said: “In the face of Covid -19, Local Authorities, including Walsall had greatly increased challenges. Despite this, and by maintaining strong financial governance, we have been able to deliver services to Walsall residents and service users to budget, resulting in a small pre-audit underspend of £453k. Given the unprecedented challenges of the last year, this is a significant achievement.”
“The current revenue and budget going forward reflects our prudent financial projections for the next year, as well as the allocation of specific grants that are so far unspent. Most of this money is already committed to our ongoing response to Covid – 19, or is pledged for statutory services. “
“Whilst it appears that we are £65 million additional in reserves, this is revenue yet to be spent and has come to us via Covid-19 grants for ongoing test and trace and similar essential operations. It will also support dedicated borough improvements as well as the general cost of day -to -day pressures going into 2021 - 2022. Walsall Cabinet will continue to monitor the situation and continue to expect that the Government will reimburse us pound for pound for future costs.”
As the council refocused its resources in response to Covid-19 and following the closure of services and facilities, the report states that the impact of Covid-19 income loss was significant. It had a considerable effect on the council’s collection fund and led to delays in the delivery of approved budget savings. The report also confirms that treasury management was in accordance with the Code of Practice on Treasury Management and Walsall complied with all statutory Prudential Indicators in 2020/21.
This detailed assessment of impact in relation to 2021/ 22 is ongoing and will again be reported to Cabinet in July 2021.
Notes to editors:
- The Cabinet report outlines the pre-audit revenue and capital financial outturn position for 2020/21, financial and treasury indicators for 2020/21 and an updated assessment of Covid-19 funding to address cost pressures and income losses.
- The report seeks approval to begin formal public consultation regarding future options for the continued provision of the appointeeship service to support a decision as part of the 2022/23 budget process.
- The net revenue pre-audit outturn is £127.12m against a budget of £127.57m, an underspend variance of £453k (0.07% of gross expenditure). The pre-audit capital outturn is a net ‘breakeven’ position after council funded carry forwards of £38.87m.
- Pre-Covid-19, the council was in a strong financial position with an ambitious transformation agenda designed to deliver a sustainable council well into the future. In common with all other councils, Covid-19 has severely challenged the council's finances and the resources available to deliver change.
- The council continues to play an active role in the overall national response to Covid-19. Government has to date allocated £65.89m of funding (plus £5.05m of support to Walsall residents and £122.73m for Walsall businesses)
- The impact of Covid-19 includes significant loss of income following closure of services and facilities, a significant impact on the council’s collection fund and delays to the delivery of approved budget savings as the council has refocused its resources on its response to Covid-19.
- A detailed assessment of impact in relation to 2021/ 22 is ongoing and will be reported to Cabinet in July. Covid-19 funding requires careful management to ensure the council is not put under any financial strain, leading to uncertainty about future financial stability.
The full report can be found here: