Agenda item

Revenue and Capital Outturn 2022/2023

Report of the Director of Finance and Public Value (DF/23/53) on the Revenue and Capital Outturn 2022/2023, attached.

Decision:

RESOLVED

(a) the draft outturn for 2022/23, after carry forwards and contributions to and from balances, reserves and provisions, shows an increase in the General Fund Balance of £156,000 against the approved revenue budget be noted;

(b) that the 2022/23 revenue outturn be approved, including transactions on earmarked reserves and provisions, spending against budget, treatment of over and under spending and the implications for balances, as set out in the tables and the narrative of the report;

(c) that the 2022/23 capital outturn be approved including spending against budget and proposed carry forwards, in accordance with the tables;

(d) that the use of capital finance as set out in the Determination of Capital Finance section 12 of the report be approved;

(e) that a total of just over £14.1 million is set aside from revenue resources as Minimum Revenue Provision (provision for credit liabilities to repay debt);

(f) that the Prudential Indicators as set out in section 11 of this report be noted; and

(g) that the total monies owing to the Council as at 31st March 2023 also be noted.

Minutes:

(Councillors Biederman, 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 and Public Value (DF/23/53) 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 presenting the Revenue and Capital Outturn position for 2022/2023.

Members had received regular budget monitoring reports throughout 2022/23 in which budget pressures and risks had been identified. The outturn underspend of £156,000 had been achieved after a contribution to the budget management reserve of £1.5 million and a carry forward of £500,000 into 2023/24 for Highways. The final outturn position was an improvement from the £3.6 million overspend forecast outturn which had been reported to Cabinet on 8th March and a significant improvement on the £30.5 million forecast overspend at month 2. The organisational wide response to the financial challenges faced by the authority, resulted in £25.4 million of additional in year savings, income and alternative applications of funding being identified. Delivery of savings and additional income contained within the budget totalled £33.7 million against planned savings of £38.7 million.

There were overspends primarily to the budgets for Integrated Adult Social Care and to Children and Young People's Futures, for which sections 2.1 and 2.2 provided further detail. However, these were offset by underspends in other services, use of COVID carry forwards and additional income from interest on balances and business rates pooling gain.

As set out in the Report, just under £1.4 million of underspend on the Public Health Grant had been transferred to the ring-fenced Public Health Reserve.

When the Council approved the 2022/23 budget in February 2022, it agreed to use just under £29.9 million of earmarked reserves to support its revenue expenditure and invest to save initiatives as well as funding of various one-off projects including service transformation economic recovery, bridges, fostering network and Special Educational Needs staffing amongst others.

The Dedicated Schools Grant Special Educational Needs and Disabilities (SEND) Service continued to be under significant pressure and the Report outlined the accounting treatment of these deficits, through the (Capital Finance and Accounting) (England) (Amendment) Regulations 2020 (SI 2020 No 1212).

The SEND element of the Dedicated Schools Grant year-end position was a shortfall of £38.9 million, which was shown in more detail in paragraph 5.2 of the Report.

Detailed explanations of the final financial position for each service area were given in section 2 of the Report, with highlighted figures below;

Adult Care and Health services - overspend of £2.3 million;
Children and Young People's Futures - overspend of £19.6 million (excluding the Dedicated Schools Grant);
Public Health, Communities and Prosperity - overall underspend of just under £2 million;
Corporate Services - overall underspend of £2.3 million.

· Climate Change, Environment and Transport, - an underspend of just over £5.5 million.

In terms of other impacts, the national staff pay award for 2022/23 (£1,925 for each full time employee) turned out to be £6.5 million more than the 2% used to set the budget in February 2022.

The Authority's borrowing was at fixed rates at the time the borrowing was taken out (before 2009) but interest income on balances depended on current interest rates, therefore increases in the Bank of England base rates had resulted in additional income of almost £3.5 million more than budget.

Section 2.8 highlighted other outturn impacts such as the Integrated Care Agreement, the Better Care Fund (see table on page 22), Capital Finance Charges, Council Tax Hardship Support, ongoing support for Citizen's Advice and Growing Communities Together and a new grant of £1.4 million for additional responsibilities dealing with Domestic Abuse.

The Report commented on the Council’s share of the national business rates levy account, additional provision for the Authority's bad debt of £352,000 and the Local Service Support Grant as well as other small grant variations and the COVID 19 funding streams.

The Report further reported on the General Balances and earmarked reserves (excluding schools and non-schools carry forwards) which stood at just under £107.6 million.

In summary, the net underspend on the revenue budget of £156,000 had been achieved after a contribution to the budget management reserve of £1.5 million and carry forwards. For 2022/23, the Council budgeted to use £22.9 million of reserves to support its revenue budget as well as a further £6.9 million to support one off expenditure.

However financial challenges continued, demand for services was higher than before, prices continued to rise and labour market shortages were still being experienced and was being felt acutely within adults and children's services. This trend was expected to continue into 2023/24, which would create a very challenging financial environment for the Council going forward.

The Leader and Cabinet Member paid tribute to the finance teams.

The Chief Executive further updated the Cabinet on the Safety Valve discussions, resultant work streams and engagement with other Chief Executives for external benchmarking. Work would continue throughout the summer and the arising plans would be brought back to Members in due course.

The matter having been debated and the options and/or alternatives and other relevant factors (e.g. financial, sustainability (including carbon impact), risk management, equality and legal considerations and Public Health impact) set out in the Director’s Report and/or referred to above having been considered:

it was MOVED by Councillor Twiss, SECONDED by Councillor Hart, and