Agenda item

Finance Strategy Update Report

In response to the Councils request for a £76m Capitalisation Direction covering a three-year period, the Department of Levelling Up, Housing and Communities (DLUHC) issued a minded to £20m offer for 2022/23 only, subject to various conditions. This included the requirement for the Council to produce a full plan for addressing its budget gap in 2023/24 and share that with DLUHC by the end of September 2022. It was subsequently acknowledged this position would be set out in this October report.

This report demonstrates that the Council has made further good progress in prudently positioning itself to deliver, and also sets out how it would achieve, a balanced budget for 2023/24. The challenge now will be translating this work into a detailed implementation workstream and strength testing the deliverability of the assumptions that have been made particularly those around service savings and efficiencies and to avoid double-counting savings across the transformation programme.

In addition, the report sets out that work is now being undertaken to determine if the Council can avoid drawing down on a capitalisation direction for 2022/23 by bringing forward in the region £20m of non-strategic asset disposals by 31 March 2023.

[PLEASE NOTE: Should the Cabinet wish to discuss the detail of Appendix B the meeting will be required to move into Confidential (Exempt) Session]

Decision:

RESOLVED that Cabinet: -

(a) Acknowledges the materially improved financial position for 2022/23 which is now expected to produce a surplus of at least £7.8m, excluding transformation costs. This is in the context of an additional c£25m of in year cost of living pressures;

(b) Acknowledges the plan to deliver a balanced budget for 2023/24 and that its deliverability will now be tested as part of the implementation process;

(c) Authorises officers to commence the work to ensure the deliverability of the budget including any necessary consultations as required;

(d) Acknowledge the intent to consider the extent to which a capitalisation direction can be avoided in 2022/23 by bringing forward the disposal of non-strategic assets; and

(e) Agree that the current expenditure controls remain in place to generate additional in-year savings.

RECOMMENDED that Council: -

(f) Approve £1.9m of investment in 2022/23 in a specific transformation workstream in Children’s Services as set out in appendix A; and

(g) Approve the further release of earmarked reserves as set out in appendix C.

Voting: Unanimous

Portfolio Holder: Leader of the Council

Reason

Further to a recommendation agreed by Cabinet on the 7 September 2022, an update on the Councils financial strategy will be a standing item on the Cabinet agenda until such time as there is a balanced budget for 2023/24.

Minutes:

The Deputy Leader of the Council presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'A' to these Minutes in the Minute Book.

Cabinet was advised that in response to the Councils request for a £76m Capitalisation Direction covering a three-year period, the Department of Levelling Up, Housing and Communities (DLUHC) issued a minded to £20m offer for 2022/23 only, subject to various conditions which included the requirement for the Council to produce a full plan for addressing its budget gap in 2023/24 and share that with DLUHC by the end of September 2022. It was subsequently acknowledged this position would be set out in this October report.

Cabinet was informed that this report demonstrates that the Council has made further good progress in prudently positioning itself to deliver, and also sets out how it would achieve, a balanced budget for 2023/24.

In relation to this Cabinet was advised that the challenge now will be translating this work into a detailed implementation workstream and strength testing the deliverability of the assumptions that have been made particularly those around service savings and efficiencies and to avoid double-counting savings across the transformation programme.

In addition, Cabinet was informed that the report sets out that work is now being undertaken to determine if the Council can avoid drawing down on a capitalisation direction for 2022/23 by bringing forward in the region £20m of non-strategic asset disposals by 31 March 2023.

The Chair advised that there had been productive discussions at the Corporate and Community Overview and Scrutiny Committee the preceding evening.

A non-Cabinet member referred to the disposal of assets at this time and raised concerns that this was not a good time financially to be making these decisions. The Councillor also raised concerns regarding a number of schemes which were no longer able to progress due to the current hold on many items of revenue expenditure. In response to a comment the Chair confirmed that the Council was in a better position than many other Councils, and were ahead in a number of areas in addressing inflationary pressures in comparison with other Councils. The Chair also advised that any income generation from potential asset disposals had been taken into account and at present negative equity was not expected to impact the disposals.