Agenda item

*RESOLVED –

1.   That the position of the General Fund Revenue Account at the close of period 6 of the financial year 2022/23 be noted.

2.   That the strategy for achieving a balanced budget outturn position for the financial year 2022/23 be supported.

3.   That the emerging Medium-Term Financial Forecast beginning with the financial year 2023/24 be noted.

REASONS FOR DECISIONS

1.   This periodic monitoring report summarises the current assessment of the Council’s forecast outturn and set out the active management mitigations to be progressed to balance the 2022/23 budget. It also provides a robust basis for medium term financial planning.

2.   This is the second monitoring report for the 2022/23 financial year and comes at a time when the Council is experiencing financial pressures due to the current economic situation, the scale of the in-year pay award, cost inflation and the ongoing impact of the Covid-19 pandemic.

The Service Director - Finance presented a report to provide Cabinet with an assessment of the Council’s General Fund Revenue Account outturn position for the financial year 2022/23 based on activity to the end of period 6 (September 2022) and an early look at the emerging medium-term financial position. This was to meet the requirement in the Financial Procedure Rules to provide Council with regular updates on the Council’s financial position.

The budget for the financial year 2022/23 was produced against the backdrop of the ongoing Covid-19 pandemic and some of the medium and long-term effects of the pandemic relating to the demand for Council services were difficult to project. The budget assumed that income from fees and charges would return to pre-Covid levels from 2022/23 except for Sports Centre income which was anticipated would take one year longer to recover.

In the months since the Medium-Term Financial Plan (MTFP) was approved, the national fiscal and economic situation had changed dramatically and a number of in-year spending pressures had emerged. 

Table 1 in the officer’s report included a summary of the key variances for the financial year 2022/23.

The Council was committed to delivering services within the approved budget and the Corporate Leadership Team (CLT) had been working with budget holders to agree clear, robust, and immediate measures to address the adverse forecast.

Measures had included a line-by-line review of budgets, removal of all non-essential spending, a more rigorous approach to vacancy control, and maximising the use of grant funding and other funding sources. These measures, most of which were one off, would not impact on service delivery and had reduced the original forecast overspend to a more manageable in-year position.

Whilst there was an expectation that the Council would need to utilise a proportion of the Budget Risk Reserve to achieve a balanced outturn budget position for the financial year 2022/23, this would only be defrayed after close monitoring and identification of further mitigations. CLT and budget holders would continue to work with Cabinet Members towards delivering a balanced budget.

The Council’s provisional settlement for 2023/24 was now expected on or before 21 December 2022. This would be reported to Cabinet in January along with the draft MTFP, which would confirm funding levels, pressures, and updated assumptions for the period 2023/24 through 2026/27.  The report would also set out the Council’s budget strategy and set out draft proposals to ensure a balanced budget could be set for 2023/24. The final MTFP would be considered at full Council on 22 February 2023.

*RESOLVED –

1.   That the position of the General Fund Revenue Account at the close of period 6 of the financial year 2022/23 be noted.

2.   That the strategy for achieving a balanced budget outturn position for the financial year 2022/23 be supported.

3.   That the emerging Medium-Term Financial Forecast beginning with the financial year 2023/24 be noted.

REASONS FOR DECISIONS

1.   This periodic monitoring report summarises the current assessment of the Council’s forecast outturn and set out the active management mitigations to be progressed to balance the 2022/23 budget. It also provides a robust basis for medium term financial planning.

2.   This is the second monitoring report for the 2022/23 financial year and comes at a time when the Council is experiencing financial pressures due to the current economic situation, the scale of the in-year pay award, cost inflation and the ongoing impact of the Covid-19 pandemic.