Agenda item

The report will be considered by the Financial Planning Task Group on 8 July 2022 and Cabinet on 12 July 2022. A report of the Task Group’s discussions will follow.

The Chairman introduced a report within the Agenda Pack which provided an update on the final year end outturn position for the Council as of 31st March for the financial year 2021/2022.

The Chairman noted that the report was considered by Cabinet on 12th July. Prior to that, it was scrutinised by the Financial Planning Task Group on 8th July and the report from the Task Group summarising that discussion was included in the Agenda Supplement.

The following comments were received by the Section 151 Officer:

·       There have been a number of grants for Ukrainian and Afghan refugees which will be rolled forward as an earmark reserve.

·       There have been promising signs regarding improvements to income services such as leisure and carparking, with £3m improvement forecasted from Q3 to Q4 and an underspend increase.

·       Of the £11m underspend, the majority will be put aside to deal with the cost of living and inflation, which was unseen at the time of the budget. Budget is being put aside to deal with CPR at 9.1%, however, this will likely rise to 10% in September and could potentially continue at this level. This proposal to mitigate the pressure for the next year has been identified as being a one-off.

·       There is currently pressure regarding the pay award with the Council having previously budgeted for 2%, however this will not be enough, with work being done to consider what will be enough without risking national negotiations.

·       A positive aspect of the report was identified as being that the Housing Revenue Account had reported an underspend which will now go into reserves. However, it was also noted that a deficit of £25m has been identified around the High Needs and SEN area, where there is a deficit of funding in the system.

Cllr Pip Ridout, as Chair of the Financial Planning Task Group, introduced the Task Group’s report, which noted the following points:

·       This is only the second time in 20 years that the Council is in a surplus situation, with the surplus being spread into the next year in order to prepare for an increase in inflation and the possibility of a large pay award.

·       It was suggested that Scrutiny note where underspends and occurred for awareness of any service implications.

·       Two major risks have been identified as the Dedicated Schools Grant and Stone Circle.

The following comments were received by Members of the Committee:

·       It was stated that though there is a significant underspend, it was suggested that this could be attributed to vacant positions and struggling to recruit.Therefore, the underspend should not be commended if the Council is unable to deliver the services it should be delivering. It was clarified by the Section 151 Officer that purely looking at the finances, the underspend could be commended, but it should be questioned how far this impacts on performance and delivery. Additionally budget managers are responsible for recruitment, vacancies and retention and that budget for posts should only be removed if it is without detriment to performance.

·       A further area of concern was identified as being the Planning Department as there seems to be a large number of vacant posts, which is leading to a situation with increasing non-determined planning applications which cost money at hearings. It was also suggested that a large number of the Planning Department are leaving their posts due to stress rather than wage implications.

·       The Cabinet Member stated that work is being done to bring together both performance and financial metrics into one place, which will be shown in due course. In addition, the Scrutiny Committee will receive high level corporate performance reports in the future.

·       Attention was drawn to the grant support for Ukrainian refugees, with much of the support having been drafted and seconded from other departments, therefore showing as an underspend in the host department and potentially causing a knock-on for service provision. The Section 151 officer clarified that an assessment is undertaken by each Head of Service before secondment in order to identify any potential detriment to the service. Additionally, existing staff were drawn upon rather than offering short term contracts due to short timescales.

At the conclusion of discussion, it was,

Resolved:

1.     To note the revenue budget outturn position for the financial year 2021/22 and the comments of the Financial Planning Task Group.

·       To note that OS Management Committee will be receiving the high-level performance reports to be received by Cabinet, with the other select committees developing arrangements for more detail performance scrutiny.