Agenda item

Report of the Director of Finance. To be presented by the Cabinet Member for Finance and Local Investment.

This report will provide an update on the Quarter 2 budget monitoring and Council's financial position. It will seek approval for any changes to the Council's revenue or capital budgets required to respond to the changing financial scenario and the delivery of the Medium Term Financial Strategy.

The Cabinet Member for Finance and Local Investment introduced the item which provided an update on the Quarter 2 budget monitoring and Council's financial position and sought approval for any changes to the Council's revenue or capital budgets required to respond to the changing financial scenario and the delivery of the Medium Term Financial Strategy.

It was explained that, in the last update, the Cabinet Member had highlighted the significant impact of external factors, such as inflation, the rising cost of living, and high demand for services. It was noted that these pressures were still evident at Quarter 2 and there was an overspend but the positions were relatively constant. Given these external factors and the uncertainty about the impacts of a recession, the Council was focusing on mitigating actions as much as possible. It was explained that there was a need to maximise the delivery of the savings programme and it was noted that the forecast delivery for Quarter 2 savings was 61% which was an additional £2.1 million compared to Quarter 1. It was added that the Council would need to focus on the issues within its control to stabilise the budget position as much as possible to have the best starting position for next year.

In response to questions from Cllr Connor, the following information was provided:

-       In relation to the delivery of savings in the Adults, Health, and Communities area, the Cabinet Member acknowledged that this was always challenging, particularly with the current economic context. It was noted that Adults was a demand-led service but the Cabinet Member was relatively pleased with the performance in terms of delivering savings.

-       In relation to the delivery of savings generally, the Director of Finance highlighted that the report sought to be transparent on how the authority would manage savings in this difficult year. It was commented that there were some successes, such as the forecasted over-delivery in Children’s Services but it was highlighted that, across all areas, the Council’s planned response was the most important thing to consider.

-       The Director of Finance noted that a realistic approach had been taken in the draft budget strategy for next year which proposed moving on from some legacy savings, where delivery was not possible, and introducing new proposals. It was explained that  a number of new proposals for savingsrelated to similar areas as the proposed discontinued savings but considered new approaches. It was added that this was a demanding programme of savings and that development work had taken place to ensure that the Council could track delivery as much as possible.

-       In relation to the use of agency staff in Corporate Finance, the Director of Finance noted that this had been a characteristic for some time but that there were periodic recruiting tranches to reduce dependence on interim staff. It was added that a number of jobs were being advertised and it was hoped to confirm some appointments shortly.

RESOLVED

1.    To note the forecast total revenue outturn for the General Fund of £16.1m comprising £8.1m base budget and £8.0m (39%) savings delivery challenges and note that Directors are developing actions to bring the forecast down before the end of the year. (Section 6, Table 1, Table 2 and Appendices 1 & 3).

2.    To note the net DSG forecast of £3.8m overspend. (Section 6 and Appendix 1).

3.    To note the net Housing Revenue Account (HRA) forecast is £0.3m over budget. (Section 6 and Appendices 1 and 2).

4.    To note the forecast GF and HRA Capital expenditure of £337.8m in 2022/23 (excluding enabling budgets) which equates to 66% of the revised capital budget (Section 8 and Appendix 4).

5.    To note the debt write-offs approved in Quarter 2 2022/23 (Appendix 7).

6.    To approve the revenue budget virements and receipt of grants as set out in Appendix 6.

7.    To approve the proposed budget adjustments and virements to the capital programme as set out in Table 3 and Appendices 5 and 6.

Reasons for decision

A strong financial management framework, including oversight by Members and senior management, is an essential part of delivering the council’s priorities and statutory duties. This is made more critically important than ever as a result of the on-going financial implications placed on the Council by the Covid-19 crisis and the uncertainties surrounding the wider economic outlook.

Alternative options considered

The report of the management of the Council’s financial resources is a key part of the role of the Director of Finance (Section 151 Officer) in helping members to exercise their role and no other options have therefore been considered.