Council considers updated financial position with £44.1M Reserves
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A Caithness councillor was among members who commented on a revenue report and update on Highland Council's year end financial position with potential reserves of £44.1 million.
The budget report to the council on March 5 provided the context of the revenue budget – this year in particular has seen a rapidly changing environment in relation to Government funding.
The council now has increased clarity on a number of recently announced funding and some formal confirmation is still awaited.
Depute leader, councillor Alasdair Christie, said: “This higher level of reserves is very good news and puts us on a stronger footing which will enable further investment, but also gives the council the essential medium term financial sustainability we need to manage future risks. The focus and targeting of our activity will continue to be on investing in people, places, business and the Highland economy.”
Wick and East Caithness councillor Raymond Bremner (leader of the opposition), said: “I look forward to continued collaboration on the further proposals for investment which will be crucial in helping our communities to recover from the impact of the pandemic.”
The forecast of an overall year end surplus of £3.1 million for the financial year 2020/21, was reported in the quarter three revenue budget monitoring to the Corporate Resources Committee on February 25.
The impact of this surplus would increase non-earmarked general fund balances to £26.3 million at financial year end.
Since that position was reported, three additional revenue funding streams are expected to come to Highland Council. These include a further £3.8 million for the income recompense scheme; £11.8 million one off Covid-19 funding for 2020/21 and a further £2.2 million for education logistics.
The combined effect of these expected funds would increase the council’s 2020/21 underspend by £17.8 million, potentially putting year end non-earmarked general fund balances at £44.1 million. The actual year end position will most likely be different from this dependent on actual expenditure and income in the final quarter of the year.
As part of the approved collaborative budget, members have agreed £9.8 million of investment as part of the Health and Prosperity Strategy.
Members discussed the impact of the additional funding and agreed that plans for a second phase of investment should be developed for consideration at the June meeting of the full council.