Issue - meetings

Purpose of Report

To present the second quarter’s performance (up to 30 September 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 September 2022  and the projected outturns for 2022/23 be noted.

2.               That the underlying impact of the pressures and underspends identified in paragraphs 3.3 (and Appendix B), 4.3 (and Appendix D), and 5.2 (and Appendix F) of the officer’s report be noted.

3.               That the changes to the General Investment Programme and Housing Investment Programme as approved by the Chief Finance Officer and Lincoln Town Board as detailed in paragraphs 7.3, 7.4, 7.5 and 7.12 of the officer’s report be noted.

4.               That the changes to the Housing Investment Programme, as detailed in paragraph 7.9 of the officer’s report, be approved.

Alternative Options Considered and Rejected

None.

Reason for Decision

The Council approved a balanced budget earlier in 2022, but much had changed since that point.  Spiralling inflation, soaring energy prices and nationally agreed pay agreements were set to add significant cost pressures to the Council’s budget.  These were in the main part caused by national issues, beyond the Council’s control, and were impacting all Councils.  In addition, the current cost of living crisis had the potential to increase demand for the Council’s services by those who relied on the safety net provided by local government.  These unforeseen and unavoidable pressures had seriously impacted the assumptions that underpinned the MTFS.  As a result of these pressures, the General Fund was currently forecasting a significant financial shortfall for 2022/23, with cost pressures also in the Housing Revenue Account and Housing Repairs Service.

The impact of these new financial pressures the Council was facing 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, would have implications for the range and level of services that the Council could continue to provide.

As a result, the Council was developing a range of mitigation actions, as part of a financial recovery programme, to ensure it retained a sustainable financial position in 2022/23 and in the medium-term.  Alongside this the Council was continuing to lobby Central Government for funding to support councils through these inflationary pressures, and for long-term sustainable funding settlements for local government.

As in recent years, there would continue to be a need for strong budgetary control in this financial year to balance expenditure and income within budget.

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 second quarter (up to 30th September 2022) the forecast financial position of the Council was detailed at paragraph 2.6  ...  view the full minutes text for item 50