Agenda item

To receive the Financial Year 2022/2023 - Quarter One Revenue Budget Monitoring report of the Chief Executive, to be considered by Cabinet on 27 September 2022.

Please note an additional report from the Financial Planning Task Group, following its meeting on 26 September 2022, will be published as an agenda supplement.

The Chairman introduced a report within the Agenda Pack which presented the first quarterly revenue budget monitoring forecast position for the financial year 2022/23. It also provided an update on the MTFS and budget gap for the financial year 2023/24.

The Chairman noted that in Agenda Supplement 3, was a report from the Financial Planning Task Group, which considered the Cabinet report on Monday. Cabinet received the report, and the Task Group’s verbal comments, on Tuesday.

The following comments were received by Cllr Nick Botterill, Cabinet Member with responsibility for Finance:

·       For Quarter One there had been forecasted an underlying overspend for the year of £12.350million, however with mitigations in place this will be reduced to £6.020million.

·       The impact of pay inflation was discussed as being the largest single contributor having caused 60% of the overspend. It was acknowledged that when the budget was set it had been based on a pay increase of 2%, however it is likely that trade unions will settle at a level of around 6.6%. These pressures have added a spend of £6.6million.

·       It was stated that the Council has taken the correct actions in order to have the overspend under control.

The following comments were received by the Section 151 Officer:

·       The Council had set aside £9million in reserves to deal with inflation pressure, which would be applied to ensure that the Council balances the budget for the financial year.

·       Other authorities are also in a similar situation with overspending.

Cllr Gavin Grant introduced the report provided by the Financial Planning Task Group, which noted the following points:

·       Attention was drawn to Adult Social Care which had shown an overspend that reflected a change in market preference to use domiciliary care rather than residential care.The positive work conducted by procurement was highlightedwith a reduced cost in residential care. It was also acknowledged that there are factors beyond the Council’s control within the care market.

·       Children’s Serviceswas highlighted as having had an overspend, however this could potentially be down to the impacts of Covid.

·       The Dedicated Schools Grant was raised, with Cabinet Members urged to ensure that this responsibility is not transferred to Wiltshire Council as this would cost £8.356million.

·       The importance of activities of identification and action plans that could be put in place to seek savings was stressed as the Council moves through further financial quarters. Attention will be given department by department to what spending is taking place and whether savings have been found or whether they remain an aspiration.

The following comments were received by Members of the Committee:

·       At Cabinet, questions were asked around the staff pay award and inflation, which were satisfactorily answered by officers.

·       It was explained that the staff pay award had been included in Quarter One, as an estimate had been included. It was noted that currently one trade union had accepted an offer, however three trade unions must agree as a collective.

·       It was questioned whether the proposed minibudget from central government would have an impact on the revenue budget both immediately and medium term. It was clarified that borrowing costs would have a material impact on what the Council would be able to do, however currently the situation is unknown until the budget is confirmed.

·       It was queried how £6million had been saved, to which the Section 151 Officer noted that the budget, when approved by Full Council is the best set of estimates available and that Directors and Heads of Services have to balance vacancies, recruitment and department performance.

·       It was queried why there had been an increase of over 5% for EHCPs whilst there had not been an increase in pupils. It was stated that there will be an entire programme dedicated to the induction of EHCPs as part of the Council’s vision for SEND.

·       It was questioned whether it would be possible to strengthen the Council’s early health offer due to the savings which had been made, to which it was stated that the Council has began to investigate the budget for next year with work being conducted by Oxford Brookes University into early intervention.

At the conclusion of discussion, it was,

Resolved:

The Overview and Scrutiny Management Committee agreed to note:

1.     The current revenue budget is forecast to overspend by £6.020m by the end of the financial year and that this will be managed through the use of earmarked reserves;

2.     The current forecast savings delivery performance for the year;

3.     The updated position in respect of the current estimated financial gap for 2023/24; and

4.     The report of the Financial Planning Task Group, having reviewed the report in detail before Cabinet.