Agenda item

Report of the Chief Executive

Cllr Botterill, Cabinet Member for Finance, Development Management and Strategic Planning presented the report setting out the revenue forecast position for 2022/23 as at 30 September 2022 for the second quarter budget monitoring period.

Cllr Botterill explained that the quarter 2 position provided a clearer picture in relation to the forecasts available for quarter 1. The current forecast indicated an underlying overspend for the year of £13.401m with one off mitigations in place resulting in a net overspend for the year of £3.755m. No proposals were made for this variance however, more certain forecasts would be provided in quarter 3 leading into the final year end position and set out recommendations for any adverse or favourable variance, with the fall back being the utilisation of the reserve held for inflation pressures being experienced during 2022/23. 

Cllr Ian Thorn paid tribute to the work undertaken by officers and the Financial Planning Task Group/Overview and Scrutiny Management Committee, and commented on the following:

·       Reductions in the Education and Skills budget. In response, officers signposted to paragraphs 32-34 of the report, which detailed the reasons for reductions, which in the main was the reduction, since quarter one, in the forecast overspend on SEND Transport.

·       Overspends on the Planning budget. In response, The Leader, Cllr Botterill and officers explained that this was due to the need for agency staff to cover existing vacancies, and increased costs associated with Planning Appeals.

·       Holding vacancies as a driver to reduce costs and the impact on the delivery of services. In response, officers reported that a number of services were holding vacancies open in order to balance budgets, and this varied across the organisation. Agency staff were also employed where necessary to provide services.

·       The sustainability of a Cabinet member being responsible for two major portfolio areas. In response, Cllr Botterill confirmed that he had successfully dealt with multiple layers of complexity in the past and noted that his portfolio areas were sustainable in the long term, especially with the assistance and support of other Cabinet members and officers.

Cllr Graham Wright, Chair of the Overview and Scrutiny Management Committee and Cllr Pip Ridout, Chair of the Financial Planning Task Group reported that the Committee and Task Group met on the 25^th of November 2022 to consider the report. Cllr Pip Ridout reported that Overview and Scrutiny Management Committee would be reviewing future Cabinet reports with input from the Financial Planning Task Group. They recognised that, being halfway through the financial year, that this is an improving position from Q1 in terms of the net overspend 2022/23. They explored the reasons for this decrease and were reassured that revenue budgets were being managed effectively. They also considered:

·       The savings forecasts and whether there is confidence that the savings will be delivered

·       How increased demand, in some areas, will mean calling upon the Latent Demand Reserve

·       Whether the Council were using agency staff and how those costs were being managed

·       How the close management of some contracts were holding down costs

·       Why any additional funding raised would be used to support corporate costs

·       How income forecasts next year will be improved by taking into account current trends 

There were no significant concerns raised by the Management Committee and Task Group and they will continue to monitor the progress of the revenue budget.

Cabinet also noted that the Centre for Governance and Scrutiny recently provided training for Overview and Scrutiny members on effective finance scrutiny. The training was well received, and key messages were:

·       Financial uncertainty at a national and global level placed greater responsibility on Overview and Scrutiny to scrutinise the council’s financial health and planning regime

·       Though we have a well-run council, it is vital not to become complacent. “Councils are only three decisions away from financial peril” and the experiences of some other councils that told themselves everything was fine bear this out.

·       The need to avoid ‘line-by-line’ scrutiny and instead focus on scrutinising the robustness of the council’s budgeting process and on looking a year or more ahead to ensure the council is prepared for the challenges ahead.

Cllr Gavin Grant commented on the windfall payment from BT in the delivery of fibre broadband and how else it could have been utilised, and a request for additional detail about the alternative approaches to bridge current shortfalls in required savings of £3.290m. In response, the Leader, Cllr Botterill and officers noted that applying the windfall payment to the transformation reserve, as detailed in the report, was a prudent decision, especially as the first option for the Council is to balance its budget. The windfall payment would help to deliver efficiencies in the medium and long term. All proposals would be considered to manage the need for savings and if necessary, these would be considered by Cabinet to achieve a balanced budget.

Resolved:

Cabinet approves:

a)    the transfer of an additional £0.826m from the Transformation Reserve.

b)    the transfer from the Latent Demand reserve, as detailed in the reserve paragraphs, the timing and value of which span this and the next financial year.

c)    the transfer of the £3.330m of BT Gainshare monies to the Transformation Reserve.

Cabinet notes:

a)    the current revenue budget is forecast to overspend by £3.755m by the end of the financial year.

b)    the current forecast savings delivery performance for the year.

Reason for Decision:

To inform effective decision making and ensure sound financial management as part of the Councils overall control environment.

To inform Cabinet on the forecast revenue financial position of the Council for the financial year 2022/23 as at quarter 2 (30 September 2022), including delivery of approved savings for the year.