Agenda item

To inform Cabinet of the Council’s forecast 2022/23 financial position as at the end of October 2022. The report covers the following areas:                                     

·         General Fund Revenue Budget

·         Housing Revenue Account Budget

·         Capital Programmes – General Fund and Housing Revenue Account

Purpose of report

To inform Cabinet of the Council’s forecast 2022/2023 financial position as at the end of October 2022. The report covered the following areas:

·         General Fund Revenue Budget

·         Housing Revenue Account Budget

·         Capital Programmes – General Fund and Housing Revenue Account

Decision

That Cabinet reviewed and noted the forecast 2022/2023 outturn position for the General Fund and HRA Revenue and Capital budgets as at the end of October 2022.

Alternative options considered and rejected

This was an update report for noting only.

Reason for decision

Cabinet Members should be kept up to date on the financial position of the Authority, as effective budget management was critical to ensuring financial resources were spent in line with the Budget and were targeted towards the Council’s priorities. Monitoring enabled the early identification of variations against the plan and facilitated timely corrective action.

This report provided an overview of the forecast 2022/23 financial position for the Council and focused on the position as at the end of October 2022.

The Deputy Leader of the Council highlighted the following items from within the report:

·         Table 1 of the report contained General Fund Revenue Budget Amendments; in particular it was noted that there were three approvals from November 2022 related to the Inflation Reserve and the Local Priorities Reserve.

·         Council approved a number of budget adjustments on 24 November 2022 which would fund the forecast overspends on electricity (£199k), fuel (£200k), and workshop (£280k). The budget adjustments reduced the overspend at net cost of service from £817k to £138k.

·         Table 3 showed the significant forecast variances as part of the General Fund Revenue; the salary vacancy factor sum of £446k resulted from a reduction in vacant posts across the Council and increases in agency provision.

·         Table 5 summarised the General Fund Capital forecast outturn position, which forecasted a £774k underspend.

·         Section 6 of the report gave an update on the Housing Revenue Account revenue budget. The budgeted surplus was fully utilised to fund future investment in stock growth and property maintenance.

·         Table 11 within the report shows a forecast underspend of £9.6 million.

·         Since budgets were prepared last autumn and approved by Council in March 2022 there had been an unforeseen increase in inflation and energy costs. As part of the outturn report, an inflation reserve of £500k was created for the General Fund to absorb any potential cost pressures during the current financial year.

·         The original budgeted price per litre for fuel was set at £1.10; however the latest bulk purchase unit price paid was £1.48. If the price of fuel continued to rise at the same rate for the remainder of the year there would be a pressure of circa £230k for the current financial year. The budget amendment of £200k to increase the fuel budget allocation was approved by Full Council at their meeting held on 24 November 2022.

·         The utility budget allocations for the General Fund and the Housing Revenue Account were increased by Full Council at their meeting held on 24 November 2022 by £199k and £167k respectively.

·         In 2023/2024 it was expected that the General Fund would have a projected increase of £1.247,500, and the Housing Revenue Account would have a projected increase of £795,300.

·         The Financial Risk Register attached as Appendix E to the report was updated on a monthly basis to reflect all known risks.

The following points were raised during discussion:

·         The financial management of the officers involved gave great confidence. It was clear that there were increased budgetary pressures; if these were excluded then the forecasted variances were minimal.

·         Although repairs and improvements were required to some of the Council’s housing stock, there had been an upturn in recruitment which would mean that the increased surplus on the Housing Revenue Account could be employed in 2023.

·         The Council had contained costs pressures due to its reserves; it was positive to be able to make a net contribution to those reserves.

·         It was positive to be able to provide a degree of social housing.

·         Budget monitoring reports had been presented to the Finance, Economic Development and Corporate Services Overview and Scrutiny Committee on 19 July and 22 September 2022.