Agenda item

The Cabinet considered a report of the Corporate Director of Resources which provided Cabinet with updated information on the:

(a)          forecast revenue and capital outturn for 2022/23, based on the position to September 2022;

(b)          forecast dedicated schools grant and schools position as at 31 March 2023, based on the position to 30 September 2022;

(c)           forecast for the council tax and business rates collection fund position at 31 March 2023, based on the position to 30 September 2022; and

(d)          details of the forecast use of and contributions to earmarked, cash limit and general reserves in 2022/23 and the estimated balances that will be held at 31 March 2023.

The report also sought approval of the of the revised capital programme 2022/23, other budget adjustments and proposed sums treated as outside of the cash limit in year and provided Cabinet with an update on progress towards achieving MTFP(12) savings in 2022/23 (for copy see file of minutes).

Councillor R Bell, Deputy Leader of the Council and Portfolio Holder for Finance commended officers for a comprehensive and thorough report and budget managers across the Council for their continuing efforts to manage budgets. The unavoidable cost pressures being experienced currently were immense. Inflation and interest rate increases were impacting on pay and the price of everything we buy. The escalating demand for children’s social care and home to school transport was resulting in significant overspends. Apart from Adult and Health Services and Resources, all other services were forecasting overspends against their cash limit budgets this year, despite any ongoing covid related pressures and inflationary pressures linked to pay and price inflation being treated outside their cash limits.

There remained significant uncertainty over the financial settlement from government from the next year into future years and the Council would await with interest the forthcoming budget announcement. The strong financial standing of Durham was better than many other councils. An amended capital programme, taking into account reprofiling would result in a huge capital programme. There were a range of budget pressures outside of the Council’s control, with many pressures continuing to impact into the next financial year. Strong financial resilience meant that some pressures could be met from reserves this year and into next, however, as everyone was accurately aware this was not a sustainable position to move forward. It did however, allow the Council to reform to find savings whereby difficult decisions would need to be made without significant funding from the Government.

The Leader of the Council explained that accurately forecasting and keeping track of the finances for a Council with the scale and complexity of Durham was a huge challenge and indeed, managing finance was a key issue for us all set against a backdrop of increased demand, volatility, and an uncertain outlook in terms of future finance settlements. Pay and price inflation, particularly around energy, waste and transport costs were placing unprecedented pressures on the Council’s budgets which had been reflected in the forecasts. This would continue into next year and the continued uncertainty in terms of a government settlement meant that the Council would need to carefully reflect on updated forecasts in terms of impact it would have on the 2023/24 budget and on the MTFP position.

Resolved:

That the recommendations in the report be approved.