Agenda item

The Cabinet considered a report of the Corporate Director of Resources which provided Cabinet with information on the final revenue and capital outturn for the General Fund for 2022/23 and final outturn for the Council’s Council Tax and Business Rates Collection Fund for 2022/23. The report also detailed the use of and contributions to earmarked, cash limit and general reserves in year and at year end together with the closing position regarding balances held at 31 March 2023; and achievement of Medium Term Financial Plan (MTFP) (12) savings targets in 2022/23 (for copy of report see file of minutes).

Councillor R Bell, Deputy Leader of the Council and Cabinet Portfolio Holder for Finance placed on record his thanks to the Corporate Director and his team for the very comprehensive and thorough report, which provided a detailed breakdown of financial performance across the last financial year and the position at the year end.

Councillor R Bell referred to financial performance being impacted by high inflation and successive bank interest rate increases across the year, together with legacy issues caused by the pandemic in terms of waste tonnages and income from leisure centres.

Residents and businesses had also been impacted by high inflation levels and increases in the bank interest rates, which had in turn driven additional demand and costs towards the Council as we had sought to help vulnerable people and businesses at these difficult times.

Many of the issues featured in the report, such as the overspend on Looked After Children placements last year; the budget shortfall as a result of the local government pay settlement last year; and the overspend in energy, home to school transport and waste budgets had to be accommodated in base budgets in the current year.

With the exception of Resources and Adult and Health Services, all other service groupings had an in-year cash limit overspend in 2022/23. The Children and Young People’s Services outturn was a cash limit overspend of £14.252 million to year end, which had required a transfer from corporate reserves to offset this at the year end.

At the same time last year £10 million was set aside as earmarked reserve to help meet the expected inflationary pressures in 2022/23 in relation to our pay, waste, transport and energy budgets.

To ensure the General Reserve was in line with the policy agreed by Council in February officers had transferred £5.5 million from the MTFP Reserve at year end to ensure the Council went into the current financial year holding the minimum level required for an organisation of the size and complexity and with the risks the Council managed. The General Reserve balance at 31 March 2023 was just over £26 million.

In terms of the Capital Programme, it was pleasing that £143 million of capital expenditure was delivered last year, broadly in line with the level of capital spending achieved in 2021/22 – and significantly higher than what the Council was able to deliver in the years prior.

Whilst this was £22 million less than what was anticipated there were good reasons for this underspend and as the report outlined, the budget and funding was to be re-programmed.

In summary the report continued to demonstrate that the Council had strong financial resilience and exercised prudent financial management. This resolve and the strength of the balance sheet would continue to be tested going forward both now and in the future.

The Leader of the Council explained that managing the budget was difficult at the best of times due to the scale and complexity of the Council, however, it had been particularly challenging in 2022/23 as the Council had faced significant demand and volatility in its cost base.  Pay and price inflation – particularly energy, waste and transport related costs had placed unprecedented pressure on budgets last year.

The Leader of the Council said that a close eye would need to be kept on Looked After Children costs across the coming months.

The outturn position for our maintained schools was a significant improvement on the £7.3 million of their retained reserves they had anticipated drawing on when the budgets were set – with only £423,000 required to be drawn down in year.

A small underspend against the High Needs DSG last year was the first time since 2015/26 that the Council had not overspent against the grant since the new statutory requirements were brought in.

The Leader of the Council passed on her thanks to everyone concerned in the delivery of significant capital expenditure in year in difficult and complex circumstances. 

Resolved:

That the recommendations in the report be agreed.