Agenda item - Finance Update Includes Quarter One 2022/23 Budget Monitoring Report

This report provides an update on the council’s financial position further to the financial forecasts set out in the end of June 2022 budget monitoring information. The position includes an acknowledgment of the

a) recent update to the Government’s Flexible Use of Capital Receipts statutory guidance.

b) latest forecast of the impact of the cost-of-living crisis on the council including the impact of the pay award offer made by the National Employers for local government service.

The report also recommends how the Council can ensure that it maintains a balanced budget for the current 2022/23 financial year and prudently positions itself ahead of the requirement to deliver a balanced budget for 2023/24.

RESOLVED that Cabinet: -

(a) Notes that an application has been submitted under the Exceptional Financial Support process for a capitalisation direction of £76m (£20m in 2022/23) to principally fund this Councils Transformation programme as set out in this report;

(b) Brings forward to the 28 September Cabinet meeting proposals to prudently position the council to deliver a balanced budget for 2023/24 from traditional local government financial management processes and revenue sources;

(c) Agrees to bring forward a capital receipts schedule for additional, non-strategic, asset sales that could be used as an alternative method of financing the Council’s Transformation Investment Programme via the Flexible Use of Capital Receipts (FUCR);

(d) Agrees to explore options across the council to deliver revenue through further commercialisation and a review of fees and charges as a response to the cost-of-living crisis;

(e) Approves the capital virements as set in Appendix D paragraph 76 to this report;

(f) Requests the Corporate Directors and Portfolio Holders for Children’s Services, Transformation, and Operations to bring forward papers outlining

(i) in-year service pressures and the mitigation strategy that will be put in place to manage them.

(ii) the timeline for the increase in costs for the transformation programme and provide an update on the delivery of 2022/23 budgeted and future years savings.

(g) Agrees to place an update on the Financial Strategy as a standing Cabinet agenda item until such time as there is a balanced budget delivered for 2023/24;

(h) Agrees that no new financial commitments will be made until such time as there is a balanced budget for 2023/24 other than with the specific agreement of the Chief Finance Officer in consultation with the Portfolio Holder for Finance; and

(i) Prepare financial forecasts based on the assumption of accepting and receiving a £20m capitalisation direction for 2022/23 from government which will need Council approval, to be sought once a final offer has been received from DLUHC.

Voting: Unanimous

Portfolio Holder: Leader of the Council

Reason

To comply with accounting codes of practice and best practice which requires councils to regularly monitor the annual budget position.

To provide a financial update to Cabinet further to the update to the Governments Flexible Use of Capital Receipts guidance and the realisation of the risk outlined in the 2022/23 Budget report.

To comply with the council’s financial regulations regarding budget virements.

The Leader of the Council presented a report and additional addendum, copies of which had been circulated to each Member and copies of which appear as Appendix 'A' to these Minutes in the Minute Book.

Cabinet was provided with an update on the council’s financial position further to the financial forecasts set out in the end of June 2022 budget monitoring information. Cabinet was informed that the position includes an acknowledgment of the: -

a) recent update to the Government’s Flexible Use of Capital Receipts statutory guidance.

b) latest forecast of the impact of the cost-of-living crisis on the council including the impact of the pay award offer made by the National Employers for local government service.

In addition, Cabinet was advised that the report also recommends how the Council can ensure that it maintains a balanced budget for the current 2022/23 financial year and prudently positions itself ahead of the requirement to deliver a balanced budget for 2023/24.

The Chairman of the Corporate and Community Overview and Scrutiny Committee addressed the Cabinet advising that at their recent meeting the Committee had discussed the report in detail and proposed the following recommendations in respect of this item:

The Committee recommends to Cabinet that Recommendation 7 and 8 in the report be amended to include the phrase “and the resilience reserves be restored”, to read as follows:

7) Agrees to place an update on the Financial Strategy as a standing Cabinet agenda item until such time as there is a balanced budget delivered for 2023/24 and the resilience reserves are restored;

8) Agrees that no new financial commitments will be made until such time as there is a balanced budget for 2023/24 other than with the specific agreement of the Chief Finance Officer in consultation with the Portfolio Holder for Finance and the resilience reserves are restored.

The Committee recommends to Cabinet the following additional recommendations:

· That the Futures Fund be suspended, and all additional commitments be closed until further notice

· That the Future Places ambitions and funding should be reviewed.

In relation to this the Chairman advised that the voting for the recommendations had been 6:4 (no abstentions)

Councillor Hadley addressed the meeting emphasising that more scrutiny was welcome and that the recent scrutiny meeting had been a long and useful meeting. In relation to this Councillor Hadley stressed the need to be honest.

Councillor Brooks thanked the Scrutiny Committee for their recommendations but advised that it would not be appropriate to suspend the futures fund, and highlighted the procedures in place to ensure both the Futures Fund and Future Places are managed in the proper way.