Council reports balanced finances for 2021 to 2022 – Coventry City Council

Coventry City Council will report on a balanced revenue and capital outturn report for 2021/22, but is certain that inflation, energy prices and other factors will continue to pile pressure on its budgeting for future years.

A report will be considered by councillors next week (Cabinet on Tuesday 12 July), which summarises its previous year’s budget and range of spending on services and capital schemes.

The crucial aim for councillors is to continue to deliver frontline services and maintain progress on capital projects.

Cllr Richard Brown, Cabinet Member responsible for finance, said: “We have once again balanced our final year spending, but we must continue to manage our finances especially through these very uncertain months ahead.

“Councils across the country are facing financial pressures because of soaring energy prices, record inflation levels and increases in the National Living Wage, but the Council has managed with its finances so far.”

The Council reports a balanced revenue outturn position. The original budget was £243.8m and despite a final spend of £252.8m, the local authority was able to manage the additional expenditure caused by Covid using nearly £9m of Covid funding provided by the government.

At the same time between 2021 and 2022 the Council spent £189.5m on major Capital schemes, include public realm redevelopment and the remodelled Coventry Railway Station.

Among the steps taken to manage its revenue spending the Council achieved a £2.5m underspend on its housing and homeless budget as a result of significant efforts to improve quality and reduce the cost of providing temporary accommodation.

Overspends where identified in Children’s Services of £2.4m and there were costs of £2.5m to manage the ongoing refuse drivers’ dispute.

Cllr Brown said: “Overall this is a really pleasing outturn report especially after two years marked by significant disruption and additional costs incurred as a result of Covid-19, coming on top of 12 years of austerity budget cuts to core spending.

“As a Council and with the diligent efforts of officers we have managed local funds prudently, targeting support at the areas that most need it and taking care not to commit resources in an unsustainable way.”

He added: “We must do everything to maintain our frontline services, but this is proving more and more of a challenge. We need to manage our reserves too, especially with the volatility in the national and international economy.

“The Council’s strong financial planning approach has taken account of the risk across a range of budgets such as those in Children’s Services where demand pressures

have caused large financial overspends across recent years.”

The financial outturn reports also highlighted the fact that the Council faces some significant financial challenges ahead and for the first time in several decades, there is likely to be a marked inflationary impact on expenditure in 2022/23.

The Council will be able to draw upon a robust financial position which includes some provision for inflation, but these are limited and will not be sufficient beyond the current year.

The starting position for the Council’s 2023/24 Budget is a gap of £17m although it is reasonable to expect that the impact of inflation will increase this.

Cllr Brown said: “For us, high standards of due diligence, good governance and monitoring arrangements and the maintenance of a broad mix of activities to guard against a concentration of risk are all vital factors to protect the Council’s future financial position.”

With the exception of the Council’s General Fund balance, all reserves have been set aside to deliver specific projects or manage risks.

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