Agenda item

The Executive Member for Finance and Governance submitted a report for Executive’s consideration.

The report advised Executive of the Council’s financial position as at Quarter Three 2022/23. The Council’s Scheme of Delegation gave the Executive collective responsibility for corporate strategic performance and financial management / monitoring, together with associated action. Standing Orders and Financial Procedures required Executive’s approval for major virements between revenue budgets, and in-year changes to the Council’s Capital Investment Strategy.

The report provided the necessary information to enable Executive to discharge its financial management responsibilities, setting out:

·        Projected revenue and capital budget year-end outturns as at Quarter Three 2022/23;

·        Position statements in relation to the Council’s borrowing and prudential indicators, and its reserves and provisions; and

·        Actions that the Council has taken and plans to address the issues raised.

Standing Orders and Financial Procedures and Regulations required the Executive’s approval of the proposed revenue budget virements over £150,000 (Appendix 1).

A revised Investment Strategy for the period to 2024/25 was attached at Appendix 2 for the Executive’s consideration and approval.

OPTIONS

No other options were submitted as part of the report.

ORDERED

That Executive:

1.     Note that there was a projected 2022/23 revenue budget year-end outturn as at Quarter Three of an approximate £3.4m overspend;

2.     Note that it is proposed that the final 2022/23 revenue budget year-end outturn will be funded from the earmarked Social Care Transformation Reserve;

3.     Note the progress against the Financial Recovery Plan 2022/23 as approved by Executive on 18 October 2022 and the effect on the projected 2022/23 overspend;

4.     Note the management action being taken to address the shortfall and to improve this position further, wherever possible, in order to mitigate the risk on reserves;

5.     Note the proposed implementation of a Flexible Use of Capital Receipts Strategy for 2022/23 to fund transformation costs, in particular in Children’s Services, as approved by Full Council on 7 September 2022, though there is currently a risk attached to full realisation of capital receipts in-year;

6.     Note that the current projected outturn and any non-implementation of the approved Financial Recovery Plan 2022/23 would have a negative impact on the Council’s current Medium Term Financial Plan, and that the ongoing financial challenges would continue into 2023/24 and future years. The position regarding the 2023/24 budget and the updated MTFP would be reported in a separate report to Executive and then to Council on 27 February 2023 as part of the budget strategy for 2023/24 and future years. It was noted  there was currently a great deal of uncertainty in forecasting created by potential future pay awards, inflationary pressures, and the impact on demand for services;

7.     Approve the proposed revenue budget virements over £150,000 as detailed in Appendix 1 of the report;

8.     Note the 2022/23 capital budget predicted year-end outturn of £62.167m as at Quarter Three against a revised capital budget of £69.241m;

9.     Approve the revised Investment Strategy to 2024/25 as at Appendix 2 of the report and;

10.  Note the current level of reserves and provisions as shown in the Reserves and Provisions Section of this report (paragraphs 136 to 141) and detailed in Appendix 3 of the report.

REASONS

To enable the effective management of finances, in line with the Council’s Local Code of Corporate Governance, the Scheme of Delegation and agreed corporate financial regulations.