Issue - meetings

Purpose of Report

To present the third quarter’s performance (up to 31 December 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 31 December 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 General Fund carry forward request as detailed in paragraph 3.12 of the report be approved.

4.           That the changes to the General Investment Programme and Housing Investment Programme as approved by the Chief Finance Officer detailed in paragraphs, 7.4, and 7.11 of the officer’s report be noted.

5.           That the changes to the Housing Investment Programme, as detailed in paragraphs 7.3, 7.9 and 7.10 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 had added 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, when reporting the forecast position at the end of Quarter 2, the General Fund forecasted a significant financial shortfall for 2022/23 of £912,511, with cost pressures also in the Housing Revenue Account and Housing Repairs Service.

In response to this forecast position, the Council began developing a range of mitigation actions as part of a financial recovery programme in order to ensure it retained a sustainable financial position in 2022/23 and also in the medium-term (the impact of these inflationary pressures were not isolated to 2022/23 and had permanently increased the cost base of the Council).

Included within these actions was a review of the Council’s Borrowing, Investment and Minimum Revenue Provision (MRP) strategies. This review had resulted in a proposed change to the current MRP Policy, which if approved would generate significant savings in the medium term, whilst still maintaining a prudent provision. The net saving in 2022/23 was £749,000.

As a result of this proposed reduction in capital financing costs, along with other actions taken during the year, including an in-year increase in some fees and charges and temporary recruitment measures, the General Fund was forecasting a significantly improved position for 2022/23, with a current estimate of a £70,358 budget shortfall. The forecast position on both the Housing Revenue Account and Housing Repairs Service had also improved  ...  view the full minutes text for item 85