To consider a report from the Interim Director of Finance (Section 151 Officer) (copy enclosed)
The Deputy Leader presented the final 2022/23 Revenue and Capital Budget Monitoring Report, and he began by thanking all the Finance officers, both past and present, for all the work they had done in ensuring the Council had an established track record of strong and robust financial management and this report presented the position for Quarter 3 as at 31 December 2022.
The report covered the Revenue Budget, Capital Programme and Treasury Management activities.
Since Council set the 2022/23 Budget in February 2022 the economic uncertainty, both nationally and internationally, had continued. Like all public sector organisations, the Council continued to face significant financial pressures relating to unprecedented high levels of inflation, cost of living crisis, supply chain disruption and contractual delivery risks.
These factors were coupled with increased demand on Council services, both as a result of the COVID-19 pandemic and wider health and social care system pressures. Collectively, this continued to bring a significant amount of financial challenge for 2022/23 and ongoing uncertainty for the two new Unitary Councils and Cumbria Fire and Rescue Service.
The Deputy Leader then took members through the report, in detail.
The Quarter 3 forecast outturn as at 31 December 2022 was a net £1.358 million overspend position, which was a slight improvement of £0.010m from the £1.368 million overspend reported at Quarter 2.
The number of high cost and bespoke care packages in Children’s Services had increased to five during Q3 but with intense work undertaken by the service this had now reduced to two cases from 1 January 2023.
Other cost pressures had arisen from increases in demand-led services such as SEND and Home-to-School Transport where not only was the number of exceptional routes and journeys increasing each month but the price being paid for these journeys was also increasing as a result of a lack of competition in the market.
Notwithstanding these pressures, the Council had been able to allocate some £5m of additional funds to alleviating the financial pressures felt by those most in need in the community, especially the young. This included:-
• £1.500m provided to schools to support their most vulnerable young people and ensure that breakfast clubs are available to all.
• £0.500m earmarked for the provision of free school meals during the Easter holidays in 2023
• £1m public health money to support community-based initiatives such as the development of warm hubs
• £0.500m to extend the school’s clothing grant scheme
• £0.500m to enhance the free school meals offer during school holidays
• £0.500m for direct community support delivered through Area Teams
• £0.500m for support direct to vulnerable households through the Council’s Ways to Welfare Service.
To support the fragile social care market, at a time of peak financial pressure and significant winter service demand, the Council had once again, provided additional financial support to independent providers across the sector. An in-year uplift of varying levels had been applied to all contracts from 1 October 2022 linked to the Real Living Wage increase and other inflationary factors.
The original approved net revenue budget for 2022/23 was £455.496 million. After taking account of adjustments to General Grants and transfers to and from reserves, the revised net budget was £482.928 million at 31 December 2022. The net forecast outturn was £484.286 million, an overspend of £1.358 million (0.3%).
The Deputy Leader informed members that this report was seeking agreement to increase Capital Programme 2022/23 to 2026/27 by £4.518 million. At Q3 this gave a revised total budget of £426.318 million (excluding Accountable Bodies) over the life of the current Capital Programme and a revised budget of £152.629 million for 2022/23.
The net deficit on the Dedicated Schools Grant Balance had increased from £14.692 million as at 31 March 2022 to £21.214 million in Q3, an increase of £6.523 million since the start of the year, and an increase of £0.126 million since Q2.
The forecast delivery of approved savings for 2022/23 was £14.792 million against a total target of £16.231 million (91.1%).
The Deputy Leader then moved the recommendations.
The Leader commented that although the County Council was responsible for the budget until 31 March 2023, the officers in the finance team had worked incredibly hard to ensure that we were passing on a stable budget.
He referenced the High Needs element of the budget and the issues faced by the lack of resources for this much needed service. He implored the Government to make more funding available.
The Cabinet Member for Schools and Learning agreed with the statement and felt if more money was provided services could be improved, which would then lessen the burden on this budget.
RESOLVED, that Cabinet
(1) notes the revised Revenue Budget at the provisional outturn for monitoring purposes of £482.928m as a result of the agreed transfers to and from reserves (set out in Appendix 1 of the report).
(2) notes the forecast Revenue Budget outturn as at Quarter 3 is a projected overspend of £1.358m which would result in a General Fund Balance position at year end of £23.698m if unmitigated in the final quarter.
(3) notes that Corporate Management Team is working collectively to identify and take further actions to mitigate the financial pressures to ensure a balanced budget position is achieved at year end resulting in a maintenance of the General Fund Balance at year end of £25.056m.
(4) notes the forecast delivery of approved savings for 2022/23 is £14.792m against a total target of £16.231m (91.1%).
(5) approves a Revenue Contribution to Capital (funded from an Earmarked Reserve) of £0.636m relating to:
· £0.484m to Prioritised Capital Maintenance Projects/schools Maintenance for works including asbestos removal works.
· £0.152m to Corporate Property Planned Maintenance and Improvement corporate asbestos removal works into the Corporate Capital Maintenance Fund.
(6) approves amendments to the Capital Programme, financed by external grant (Table 16 of the report) and internal revenue contributions (Table 17 of the report), which result in a total increase of £4.158m.
(7) approves virements, within the approved Capital Programme, as set out in Table 19 of the report.
(8) notes the forecast outturn for the Capital Programme 2022/23 of £121.017m against a current capital budget of £152.629m (excluding Accountable Bodies) resulting in a net underspend of (£31.612m) being reported at Q3, as set out in Table 20.