Issue - meetings

Report of the Director of Finance and Public Value (DF/22/68) outlining the Budget Monitoring position at Month 4, attached.

RESOLVED

(a) that the month 4 budget monitoring forecast and the very challenging financial position faced by the Council be noted;

(b) that the immediate action being taken to safeguard the financial sustainability of the authority be supported;

(c) that the proposed reduction to Member Locality Budgets, as outlined in paragraph 3.4 be approved; and

(d) that the savings and additional income resulting from the Financial Sustainability Programme also be noted.

(Councillors Brazil and Whitton attended in accordance with Standing Order 25(2) and spoke to this item).

The Cabinet considered the Report of the Director of Finance (DF/22/68) relating to the Budget Monitoring Position at Month 4, circulated prior to the meeting in accordance with regulation 7(4) of the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012.

At month 4 it was estimated that budgets would overspend by £17 million, excluding the dedicated schools grant deficit. This was made up of an underlying overspend of £35.6 million that was being reduced by £18.6 million of Financial Sustainability Programme (FSP) proposed savings and income.

There was also a risk that inflationary pressures could result in costs, in addition to this overspend, of more than £10 million this year.   

The pandemic and geopolitical situation had created huge financial pressures and immediate action was being taken to safeguard the financial sustainability of the authority. Work was ongoing to identify services and projects in both revenue and capital that could be transformed, modernised, remodelled, funded differently, ceased, or postponed. 

The Dedicated Schools Grant projected deficit, relating to Special Educational Needs and Disabilities (SEND), was forecast to be £34.5 million.  The outcome of the discussions with the Department for Education as part of the Safety Valve Intervention were still awaited.

The table at section 2.1 of the Report detailed the forecast outturn position by service area at month 4.

Integrated Adult Social Care was forecasting an overspend of £3.2 million and

Children and Young People’s Futures an overspend of £19.9 million and £34.5 million on Special Education Needs and Disabilities (SEND).

The remaining Directorates were forecasting an underspend of £4.6 million at month 4. The underlying forecast position was an overspend of £1.3 million and additional savings identified as part of the FSP totalled £5.9 million. Non Service items, which included capital financing charges and business rates pooling gain were forecasting an underspend of £1.5 million. The underlying position was a forecast pressure of £6.5 million, predominantly the forecast impact of the 2022/23 pay award and the FSP had identified further savings of just over £8 million.

An organisation wide Financial Sustainability Programme had been developed in June to examine areas of expenditure and develop proposals that directly addressed the in-year financial challenges. The Report included a table with a high-level summary by type of saving and included a saving of £128,000 from Member’s Locality Budgets (representing 50%, or half, of the individual member balances that had been unspent at the end of 2021/22 that were carried forward into the current year and also a £38,000 carry forward from 2021/22 as a central contingency that remained unallocated). 

The approved capital programme for the Council was £215.8 million and the year-end forecast was £185.6 million, producing forecast slippage of £30.2 million. Material and labour price increases continued to be experienced which were impacting the delivery costs and tender prices being returned.

Cabinet noted that the formation of the Financial Sustainability Programme was  ...  view the full minutes text for item 209