Agenda item

Report of the Interim Chief Executive (Section 151 Officer)

The Cabinet considered a report of the Interim Chief Executive (Section 151 Officer), which would also be considered at the meeting of Audit and Procurement Committee on 20^th March 2023, that advised Cabinet of the forecast outturn position for revenue and capital expenditure and the Council’s treasury management activity as at the end of December 2022. The headline revenue forecast for 2022/23 was for net expenditure to be £8.5m over budget. At the same point in 2021/22 there was a projected overspend of £2.5m. Appendices to the report provided: Revenue Position - Detailed Directorate breakdown of forecast outturn position; Capital Programme - Analysis of Budget/Technical Changes; Capital Programme - Analysis of Rescheduling; and Prudential Indicators.

The Council continued to face budget pressures due to increased volumes and higher costs of placements within Children’s Services and costs incurred due to the previous refuse drivers’ industrial dispute within Streetscene and Regulatory Services. A range of other smaller but still significant overspends were also being reported in several other services including Business, Investment and Culture, Transportation and Highways and Finance.

As reported at Quarter 2 (minute 65/22 referred), significant additional costs were also being faced due to inflationary pressures affecting the Council, with the approved local government pay award and costs affecting contracts for energy and social care amongst others. The in-year and ongoing impact of these inflationary pressures was a serious factor affecting the Council’s ability to manage its budgetary position.

The Council’s capital spending was projected to be £159.5m and included major schemes progressing across the city. The size of the programme and the nature of the projects within it continued to be fundamental to the Council’s role within the city. There was limited evidence that inflationary pressures referenced above were affecting capital projects this year and the assumption was that stand-alone projects that were already in-progress would be delivered as planned. It was more likely that future projects that had not yet started might need to be re-evaluated to determine their deliverability within previously defined financial budgets.

The Council’s services had moved to a business-as-usual position with activity and impacts arising from the Covid pandemic having reduced significantly. Some pockets of service activity continued to be affected but this was not resulting in a large financial cost. The Council did not expect to receive any Government support linked to Covid within the 2022/23 financial year. 

The emerging inflationary risks facing the Council and the wider local government sector had renewed the imperative to maintain financial discipline and prioritise the Council’s medium-term financial position. This would be a key focus of the Council’s activities over the remainder of the year and several key measures were set out in Section 5 of the report to help minimise the size of any budgetary overspend.

RESOLVED that the Cabinet:

1)  Approves the Council’s revenue monitoring position.

2)  Approves the revised forecast capital outturn position for the year of £159.5m incorporating:  £4.1m net increase in spending relating to approved/technical changes and £10.4m of net rescheduling of expenditure into future years.