Lead Member – Councillor Gwilym Butler - Portfolio Holder for Finance and Corporate Resources 

Report of James Walton, Executive Director of Resources 

RESOLVED:

That Cabinet:

In respect of the revenue budget:

a)    Note that the outturn is an overspend of £8.499m.

b)    Note the consequent level of the General Fund balance is £7.093m.

c)    Note the service-related use of £33.192m of Earmarked Reserves & Provisions.

d)    Note that the combination of earmarked and un-earmarked (General) reserves is below a level that would be regarded as safe, taking into account local circumstances. The MTFS sets out an agreed plan to restore these balances to safer levels.

Relating to ringfenced funding:

e)    Note the performance of the Housing Revenue Account (HRA) – £0.768m (4%) surplus outturn for 2022/23 on £19m turnover, and the resulting level of the HRA reserve of £12.359m. The level of the accumulated surpluses held as a reserve should be reviewed and an appropriate action plan brought forward.

f)     Note that the level of school balances has increased by £2.296m, from £8.191m in 2021/22 to £10.487m. The level of accumulated net surpluses in schools’ balances is considerable, and schools should identify the rationale for holding balances at those levels. 

In respect of the capital programme:

g)    Approve net budget variations of -£4.007m to the 2022/23 capital programme (in Appendix 11) and the re-profiled 2022/23 capital budget of £111.112m.

h)      Approve the re-profiled capital budgets of £26.575m for 2023/234, including slippage of £10.747m from 2022/23, £110.787m for 2024/25 and £56.264m for 2025/26 as detailed in Appendix 15.

i)        Accept the outturn expenditure set out in Appendices 12 and 13 of £100.365m, representing 90.3% of the revised capital budget for 2022/23.

j)       Approve retaining a balance of capital receipts set aside of £17.465m as at 31st March 2023 to generate a one-off Minimum Revenue Provision saving of £0.572m in 2023/24.

The Portfolio Holder for Finance and Corporate Resources introduced report, reminding members that when the budget for 2022/23 was set, inflation was predicted at 3%, and was now at a 40 year high, there was no knowledge of the Ukraine War and subsequent unprecedented global turmoil, the surge in fuel prices, the cost of living crisis and a higher pay award than envisaged.  These factors were all compounded by extreme pressure in children’s services and adult social care.

He also drew attention to the impact of partners not meeting financial responsibilities.  He thanked staff for their work in achieving the current overspend in these circumstances and pointed out that if inflation had been as predicted then a surplus would have been achieved at the end of the year.  He thanked officers for all the hard work undertaken in achieving the position reached.

Subsequent discussion covered the percentage of intended savings made; impact of interest rates; impact of the overspend on the 2023 – 24 budget, the general reserves balance, the capital receipts programme, the LGA peer review findings and the impact of the Getting Leadership Right programme in moving forward.

The Portfolio Holder said that his aim was for reporting on progress going forward to be as transparent as possible with monthly indicators and financial reports available, rather than having to wait for compilation of end of quarter figures. He also intended those reports be provided for Transformation and Improvement Scrutiny Committees ahead of Cabinet. 

RESOLVED:

That Cabinet:

In respect of the revenue budget:

a)     Note that the outturn is an overspend of £8.499m.

b)     Note the consequent level of the General Fund balance is £7.093m.

c)     Note the service-related use of £33.192m of Earmarked Reserves & Provisions.

d)     Note that the combination of earmarked and un-earmarked (General) reserves is below a level that would be regarded as safe, taking into account local circumstances. The MTFS sets out an agreed plan to restore these balances to safer levels.

Relating to ringfenced funding:

e)     Note the performance of the Housing Revenue Account (HRA) – £0.768m (4%) surplus outturn for 2022/23 on £19m turnover, and the resulting level of the HRA reserve of £12.359m. The level of the accumulated surpluses held as a reserve should be reviewed and an appropriate action plan brought forward.

f)      Note that the level of school balances has increased by £2.296m, from £8.191m in 2021/22 to £10.487m. The level of accumulated net surpluses in schools’ balances is considerable, and schools should identify the rationale for holding balances at those levels. 

In respect of the capital programme:

g)     Approve net budget variations of -£4.007m to the 2022/23 capital programme (in Appendix 11) and the re-profiled 2022/23 capital budget of £111.112m.

h)     Approve the re-profiled capital budgets of £26.575m for 2023/234, including slippage of £10.747m from 2022/23, £110.787m for 2024/25 and £56.264m for 2025/26 as detailed in Appendix 15.

i)       Accept the outturn expenditure set out in Appendices 12 and 13 of £100.365m, representing 90.3% of the revised capital budget for 2022/23.

j)      Approve retaining a balance of capital receipts set aside of £17.465m as at 31st March 2023 to generate a one-off Minimum Revenue Provision saving of £0.572m in 2023/24.