Issue - meetings

Purpose of Report

To present the first quarter’s performance (up to 30 June 2022) on the Council’s General Fund, Housing Revenue Account, Housing Repairs Service and Capital Programmes, and to seek approval for changes to the capital programmes.

Decision

1.           That the financial performance for the period 1 April 2022 to 30 June 2022  and the projected outturns for 2022/23 be noted.

2.           That the underlying impact of the pressures and underspends identified in paragraphs 3.2 (and Appendix B), 4.2 (and Appendix D), and 5.2 (and Appendix F) be noted.

3.           That the changes to the General Investment Programme approved by the Chief Finance Officer as detailed in paragraph 7.4 be noted.

4.           That the changes to the General Investment programme and the Housing Investment programme as detailed in paragraphs 7.3, 7.10 and 7.11 be approved.

Alternative Options Considered and Rejected

None.

Reason for Decision

The Council approved a balanced budget earlier this year, but much had changed since that point. Critically, inflation had risen to the highest level in forty years, driven in part by the effects of Covid19, global supply chain disruptions, Brexit and the war in Ukraine. The consequence of this spiralling inflation on pay, contractual and energy costs had resulted in growing financial pressures for the Council, with the General Fund forecasting a significant financial shortfall for 2022/23 and with cost pressures also in the Housing Revenue Account and Housing Repairs Service.

As a result, the Council needed to consider a range of mitigation actions if it was to retain a sustainable financial position in 2022/23. Alongside this the Council would focus on lobbying Central Government for funding to support councils through these inflationary pressures, and for long-term sustainable funding settlements for local government.

The impact of these new financial pressures the Council faced could not be underestimated and were not solely related to 2022/23. These inflationary increases would permanently increase the cost base of the Council and would have implications for the Medium-Term Financial Strategy and, in the absence of additional financial support from Central Government, implications for the range and level of services that the Council could continue to provide. A further report setting out the financial impact beyond 2022/23 would be presented to the Executive later in October.

Whilst there were a significant number of planning variables which were subject to unprecedented levels of uncertainty, based on the latest set of assumptions as at the end of the first quarter (up to 30th June) the forecast financial position of the Council was detailed at paragraph 2.6 of the officer’s report

Updates were reported as follows:

General Fund Revenue Account

For 2022/23 the Council’s net General Fund revenue budget was set at £8,907,490 including a planned contribution to balances of £60,700 (resulting in an estimated level of general balances at the year-end of £2,731,299 after allowing for the 2021/22 outturn position).

The General Fund Summary was currently projecting a forecast overspend of £1,035,343 (Appendix A provided a forecast General Fund Summary), resulting in general  ...  view the full minutes text for item 35