Uncategorized

Council’s erratic financial planning questions dubious Council Tax increase.

Derby City Council has published its financial outturn for 2021/22. It demonstrates that the Council lacks competence in forecasting and planning.

In summary:

  1. The Council approved a budget for 2021/22 of £258.34m. To fund this a 4.99% Council Tax increase was required
  2. By the end of:
    1. Qtr 1 ( June 30th 2021) the Council was forecasting an overspend of £11.683m.
    2. Qtr 2 – the full year forecast overspend fell to £8.113m
    3. Qtr 3 – a further fall in the overspend was predicted, leaving the forecast at £4.813
  3. The final outturn was an underspend of £6.272m

The bottom line published numbers are different, due to unexplained budget adjustments and transfers to / from reserves which obscure the relevant, underlying, baseline position.

Council Tax

The 2021/22 Council Tax rise of 4.99% was based on the above budget requirement of £258.34m. A budget requirement closer to the actual outturn of £252m (2.38% lower) would have resulted in no Council Tax increase for 2021/22.

s 4.1.7 Cabinet Paper 13th July 2022 – Final Accounts – 2021/22 Outturn Report for General Fund,
Capital Programme, Treasury Management, Housing Revenue
Account, Dedicated Schools Grant and Collection Fund

Comment

The forecast is an important part of the Council’s financial planning and decision making process. If competently prepared, it would not have resulted in a forecast lurching from an overspend prediction of £11.7m after just 3 months which was reversed by £18m in the following 9 months. There have been no unpredicted catastrophic events which would have necessitated a significant forecast reset.

The woeful planning for Children’s Services was covered in a previous article; as expected this ended with an £8m overspend.

Council already forecasting a £12m overspend – incompetent budgeting!

Given that, overall, there has been an underspend on a like-for-like basis, where have the savings been made? The 48 page report provides a lot of numbers but little in terms of useful information for decision making and fails to communicate with the public in a clear and transparent way.

The Councillors should be sceptical about anything that the Chief Exec (Paul Simpson) and the Chief Finance Officer (Simon Riley) issue on financial matters.

Anyone who has listened to a Council or Cabinet meeting will have heard protracted bluster and waffle from Senior Officers in answer to any incisive or challenging questions.

The Auditors should be asked to review the forecasting/planning process and report to the Councillors on what needs to change to improve decision making and to comment on whether the 21/22 Council Tax increase was justified. On the face of it, it didn’t seem necessary – but then I’m sure Simpson/Riley would only offer befuddled and convoluted answers which will go unchallenged by Cllrs. A shocking sign of Derby City Council’s democratic deficit!

Post Script

Keen observers will note, from the chart above, that the Council’s orthodoxy on the final outturn is based on a £7.537m reduction in the budget (no explanation as to why the budget was reduced in an area that was always at risk of overspend)

The actual spend of £252.068m then shows an overspend of £1.265m against this reduced budget.

Through the use of transfers from various reserves, it allows a transfer back to reserves of £2.836m!

Para 1.1 (a) of the Cabinet report proudly reports:

Revenue Budget: The general fund revenue outturn position is an underspend of £2.836 million when compared to the revenue budget for 2021/22.

Taking money from reserves to declare an underspend which then facilitates a “replenishment of reserves” is disingenuous nonsense and false accounting! Why was this chicanery and manipulation of reserves not done as part of 21/22 Council Tax setting to avoid an increase.

The Cabinet should reject this report. Councillors should demand clear and comprehensive answers!

Categories: Uncategorized

2 replies »

  1. Why? We need quality shops in the centre ,if we had, people would come in enjoy a good experience,sit and have a coffee ,spend and promote Derby.I like Lidl but don’t want it in the centre of town. There are enough cheep shops with great big posters everywhere they are an eye sore.Most of my friends now won’t go into the town as they also hate the dirty unkempt streets and shop fronts. Not good.
    Pride park also deteriorated when at first it was a pleasure to drive through. How many posters do you need to advertise what the storage places are used for.The eye sore of a “garden” in front of travel lodge is not a good advert for Derby visitors. Such a shame that standards have dropped so low when something so simple could be easily rectified

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s