Agenda item

Report of the Director of Finance and Public Value (DF/23/01) on the Budget Monitoring position at Month 8. This Report will follow.

RESOLVED

(a) that the month 8 budget monitoring forecast be noted;

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

(c) that the savings and additional income resulting from the Financial Sustainability Programme be noted; and

(d) that the extension to the Dedicated Schools Grant statutory override relating to accumulated deficits also be noted.

(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/23/01) on the Budget Monitoring position at Month 8, 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 8, it was estimated that budgets would overspend by just over £7 million, an increase of £679,000 from month 6,. This position excluded the Dedicated Schools Grant deficit. This was made up of an underlying overspend of £33 million reduced by £26 million of Financial Sustainability Programme (FSP) proposed savings and income. Work was ongoing to identify services and projects in both revenue and capital that could be transformed, modernised, remodelled, funded differently, ceased, or postponed.

An inflationary pressure risk continued to be present which could result in increases to the forecast overspend if it could not be contained.

The Cost of Living Crisis and geopolitical situation had created huge financial pressures nationally and the County Council was similarly affected.

The Dedicated Schools Grant projected deficit, relating to Special Educational Needs and Disabilities (SEND), was forecast to be £40.6 million, an increase of £3.7 million from Month 6. The outcome of the discussions with the Department for Education as part of the Safety Valve Intervention were still awaited.

The table in Section 2 of the Report detailed the forecast outturn position by service area at month 8. The underlying overspend, column (c), detailed the forecast outturn position before the impact of the Financial Sustainability Programme (FSP) was taken into consideration. The impact of the proposed FSP savings was shown in column (d) and the final Month 8 overspend or underspend in column (e).

Non-Service items, which included capital financing charges and business rates pooling gain were forecasting an underspend of £6.8 million. The underlying position was a forecast pressure of £5 million, predominantly the forecast impact of the 2022/23 pay award. The FSP had identified further savings of £11.9 million.

The Month 8 position reflected £26 million of proposed savings identified through the Financial Sustainability Programme. A high level summary by type of saving (delaying / pausing, additional income, reducing spend, stopping and targeted funding) was included in section 3.3 of the Report.

The approved Capital Programme for the Council was £212 million and incorporated amounts brought forward from 2021/22, and other prior year approvals. The year-end forecast was £170.3 million of which £147.5 million was externally funded. Slippage was forecast at £41.8 million. The main areas of net slippage could be attributed to scheme variations and programme delays in Planning, Transportation and Environment, which reflected the complexity of the major schemes within this service area.

Material and labour price increases continued to be experienced which were impacting the delivery costs and tender prices being returned, within the Capital Programme.

Corporate debt stood at £2.5 million, being just under 0.99% of the annual value of invoices, against the annual target of 1.9%.

In summary, the month 8 position remained broadly in line with the month 6 forecast, however, and action continued to bring the Outturn back to a balanced position. As the Council moved into the last few months of the financial year, it needed to redouble efforts to bring the outturn closer to a balanced position and address the challenges being experienced within the DSG.

The matter having been debated and the and other relevant factors set out in the Director’s Report having been considered:

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

RESOLVED

(a) that the month 8 budget monitoring forecast be noted;

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

(c) that the savings and additional income resulting from the Financial Sustainability Programme be noted; and

(d) that the extension to the Dedicated Schools Grant statutory override relating to accumulated deficits also be noted.