Agenda item

To receive the 2022-23 provisional financial outturn report.

The report was introduced by Councillor Carlin, Cabinet Member for Finance and Local Investment as set out in the agenda pack at pages 13 to 52.

By way of introduction, the Panel was advised that the provisional financial outturn is completed every quarter and provided an analysis of departmental budget management performance and projections on where the department would be for the rest of the financial year.  The report presented was the provisional outturn for the fourth quarter and the outturn for the year 2022- 23.

The findings outlined that by the end of the financial year, the council had overspent just over £16million in Adult’s and Children’s Services which was tracked throughout the year and the forecasts were accurate.

The borough had high level of deprivation and was struggling with budgets. This was because of the overspend being primarily in Adult Social Care and it has been difficult to manage additional costs. However, prudent financial management resulted in ending the year just under budget.

The Council’s Corporate Management Team and Service Leads had undertaken a dedicated review of the budget over the previous two weeks, to look at what officers could do to manage the budgets going forward. Detailed proposals were received and were being reviewed.

The following arose during the discussion of this item:

1. The Chair sought clarification on table 1 on page 19 of the reports pack. The Chair suggested for the table to be clearer, easier to understand and more explanatory about what the figures mean. This would be particularly beneficial for new members coming on the Council. Josephine Lyseight, Assistant Director of Finance provided clarity on Table 1 – Revenue Budget Monitoring Provisional Outturn 2022-23 as set out in the agenda pack on page 19. The table outlined the impact of proposed movements to/from reserves on the final position and the movement from the outturn forecast at Qtr3. The first column set out the allocated budgets for 2022-23. Officers advised that the outturn should be identified before any transfers are made to/from reserves and this was reflected on the second and third column in the table. The revised outturn was shown on the 4^th column and the highlighted column outlines the revised outturn to budget variance and this was the key column which showed the current position. The overspend was highlighted as £16.381 M over budget. Corporate budgets, movements and contingency had brought the final underspend down and this could be seen from the general revenue total
2. In response to a question about thedelay in publishing the statement of accounts as it was noted that there was a mandatory requirement for the council to publish the document by May 2023. The Committee was advised that the delays were due to the lack of audit activity post pandemic and the accounts were not audited for about 2 years preventing the team from closing their accounts. Opening accounts were not reviewed or audited in the previous years. In terms of this issue being on a national level, there were not enough auditors available to deal with the capacity and there was a huge backlog that external auditors had to face. This issue had been escalated nationally and the team was trying to have their accounts audited in a timely fashion and have the statement of accounts published by end of July 2023.
3. Regarding the business rate reserve, the committee was advised that this was ring fenced to offset business rate income and was not the offset the overspend in Adult’s services. The Committee sought assurances in relation to replenishing the reserve which was drawn down. Officers advised that it was agreed in the 2022-23 budget planning process to draw down from the reserve to balance the budgets. The reserve was largely created at the beginning of the Covid pandemic, when the government had introduced a large number of reliefs to support businesses. Officer advised that they continued to hold the reserves as business rates were still volatile and would be useful if no further support is provided by the government. The reserve would specifically be held to deal with business rates and council tax income fluctuations, not to offset budget pressures across the rest of the council.
4. In response to concerns about where the council would be at the end of the year in terms of new bandings. The committee was advised that officers were looking at a number of proposals and had been working through 15 streams across the council to assess where savings could be made. In Adult Social Care, the costs were not expected to go down yet.  This would be a challenge going forward as the biggest pressure in the service was around temporary accommodation where there had been an increase in costs due to high rent.
5. Regarding the Dedicated Schools Grant overspend position, officer advised that there was a separate Safety Valve programme. Funding was received for 2022-23 to help mitigate the deficit. The outturn overspend was £ 3 million which was planned and agreed DFE outturn with Haringey as part of a five-year programme.
6. In response to questions asked, officers advised that in terms of budget setting, departments sign off the proposals and the saving targets that were put into the budget. The budget was set based on information provided at the time and this was monitored against the savings rate throughout the year. The 2023 – 24 budgets had been re-profiled to reflect saving targets that were not deliverable in 2022 – 23.
7. Regarding council tax collection, the collection rate quoted in the report were in relation to the bills raised for 2022 - 23.
8. The Committee questioned about the House Building Programme where there was a commitment in building 3000 Council homes over 10 years. The officers advised that there were already 2000 Council homes which would be starting on site.
9. The Committee agreed to having a meeting on Microsoft Teams with the Committee and finance officers for an hour before the next committee meeting where there would be able to go through and answer questions around the report. (Action: Clerk).
10. The Qtr1 report would be provided in September where the committee would be able to see the progress and receive an update on the overall budgetary position. The Committee agreed to go through the Qtr1 report at the next committee meeting. (Action: Clerk).

RESOLVED

Noted