Agenda item

The purpose of the report is to seek approval for the amendments required to the 2022/23 budget framework in response to the current financial climate and the impact on the budgets approved by Council on 3 March 2022.

The Deputy Leader of the Council presented a report considering amendments required to the 2022/2023 budget framework in response to the current financial climate and the impact on the budgets approved by Council on 3 March 2022.

The Deputy Leader highlighted that local government finances had been impacted by national and international events, which included increased energy costs, the employee pay award, and increased fuel and maintenance payments. A balanced budget position with no use of reserves had been presented at Council on 3 March 2022; since that time pressures on the budget had grown and therefore the immediate and medium-term outlook required revisiting.

It was estimated that the Council faced a net operating deficit of £800,000 in 2022/2023. Several actions to reduce this deficit were presented and debated at the Finance, Economic Development and Corporate Services Overview and Scrutiny Committee at their meeting held on 22 November 2022; however, further action, by using specific reserves, such as the inflationary reserve to offset this deficit was presented to members for their consideration.

The following points were highlighted during debate:

·       The Council had been given a grant of £1million to improve energy efficiency which could have been used to utilise new technologies. However, this grant could not be used because of the subsequent office move and due to supply chain issues.

·       A member raised that it was right to approve pay rises for staff to help with the cost of living, but that it was disappointing that money could not be found for buildings such as the Deepings Leisure Centre.

·       The Council was awarded £2million to enable the delivery of a new local University Technology and Innovation Centre within Grantham Town Centre, on the floor above the cinema. Initially it was expected that the University of Lincoln would occupy this space, but they gave notification that they no longer required this. The vacant space would now become the new offices for the Council, and it was confirmed that the Council owed a balance of £1.333million to the Local Enterprise Partnership (LEP). The conditions of the repayment would be presented to Council on 26 January 2023.

·       With hybrid working being more commonplace since the Covid-19 pandemic, it was important to support staff that were increasingly working from home.

·       Investments in health and safety, fire risk and security would take priority whilst spends on capital resources were under regular review.

·       The pay award was settled by Government and would be applied locally.

·       The new office space at St Peters’ Hill was on track and on budget. There were interested parties in the old Council site that was for sale.

·       There were challenging times ahead, and the Council needed more funding to continue delivering existing services.

·       It was vital that a success be made of St. Martin’s Park, as it was receiving further investment.

Having been proposed and seconded, upon being put to the vote the motion was AGREED.

DECISION:

1.    That Council approved the following amendments to the Budget framework for 2022/23: 

a)    Increase the following utility budget allocations: 

• General Fund – Electricity increase of £199k to be funded from the Inflation Reserve

• Housing Revenue Account (HRA) – Electricity increase of £167k to be funded from the HRA Priorities Reserve  

b)    Increase the Fuel budget allocation: 

• General Fund – increase of £200k to be funded from the Inflation Reserve  

c)    Increase the General Fund Workshop budget of £280k to be funded from the Local Priorities Reserve. 

2.    That Council approves the 2022/23 employee pay award which was in line with the National Employers’ agreement, providing an increase of £1,925 on all SKDC pay points from SK1 and above (backdated to 1 April 2022).  This would increase the salary costs for 2022/23 in the General Fund by an additional £880k and was to be funded from the Local Priorities Reserve. This would increase the salary costs for 2022/23 in the HRA by an additional £260k and is to be funded from HRA Priorities Reserve. 

3.    That Council delegated authority to the Monitoring Officer and Chief Finance Officer (s151 Officer) to implement the results of the National Pay Negotiations for Chief Executives in respect of the remuneration for South Kesteven District Council’s Chief Executive for 2022/23. 

4.    That Council approves the budget of £192,630.23, to be met from the Regeneration Reserve, for the additional expenditure incurred in the contract with GF Tomlinson for the demolition works at St. Martins Park Stamford.