A financial performance update, based on the mid-year position at the end of September, was presented to the authority’s cabinet on Tuesday, December 8, and saw the council’s finance team report a projected overspend of £5.2million come the end of the 2020/21 financial year.
However, this does not include further funding expected from the Government to help with ongoing Covid-19 pressures, totalling £3.2million, which would bring the shortfall down to £2million.
The breakdown of the figures shows that the pandemic has led to £33.2million of additional spending, but there is a predicted underspend on business-as-usual areas of £8.1million.
This is then further offset by the £21.8million of Government funding received so far, as well as the £2.05million handed over for lost income in terms of sales, charges and fees. The report notes that a claim of £1.6million has been made for April to July and the full year’s figure is estimated to be £2.05million.
In terms of capital spending, the picture has improved from the position in July when an overall underspend of £67.8million was being forecast across the 2020-21 programme, including £73.7million of spending being ‘re-profiled’ from the current year into next, albeit offset by £6.4million in the other direction).
As at the end of September, the predicted underspend had reduced to £31million – £30.3million re-profiling (£36million from 2020-21 into 2021-22 and £5.7million the other way) and £700,000 underspend.
In the first six months of the year, £58million was spent, including £15.5million on transport projects and £22million on school buildings, including the construction of new schools at Morpeth and Ponteland.
The council’s capital receipts (selling property and land, etc) have taken a hit though, against an original estimate of £4.7million income.
The report says the in-year position ‘is currently difficult to assess’, but adds that the ‘maximum estimated to be achieved during this financial year is £1.25million’.
This is because ‘Covid-19 has had a major effect on the confidence of occupiers and investors to commit to property deals nationally and locally’.