Agenda item

This report provides the Council’s annual forecast as at Month 4 (July 2022) for the Council’s General Fund (GF), Housing Revenue Account (HRA) and the Capital Programme (CP). The report forms part of the Council’s financial management process of publicly reporting financial performance against its budgets on a monthly basis. Reports for Month 2 and Month 3 are attached for information as this is the first Cabinet meeting since the Month 1 position was reported as part of the Opening the Books Cabinet report in July.

RESOLVED: To

1.1  Note the General Fund is projecting a net overspend of £9.483m as at Month 4. Service directorates are indicating a £24.252m overspend with a £14.769 munderspend corporately.

1.2  Note that a further number of risks and compensating opportunities may

materialise which would see the forecast year-end variance change. These indicate a net opportunity of £3.290m (risks £9.807m and opportunities of £13.097m) and are reported within Section 3 of this report. Should all these risks materialise, and none of the mitigations be effective, the Council is forecast to overspend by £19.290m. However, if none of the risks materialise and all the opportunities are delivered, the Council will underspend by £3.614m.

1.3  Note the further actions being taken, through development of the Deficit Recovery plan, to mitigate the projected overspend with a view to eliminating it by the end of the financial year. Further details are in paragraph 2.15.

1.4  To approve that the MTFS savings within Table 2b are not deliverable.

1.5  Note the Housing Revenue Account (HRA) is projecting an end of year position of a £3.147m overspend, mainly due to inflation in energy costs.

1.6  Note the Capital Programme spend to date for the General Fund of £7.882m (against a budget of £112.069m) with a projected forecast underspend of £5.207m for the end of the year.

1.7  Note the Housing Revenue Account Capital Programme spend to date of £3.478m (against a budget of £22.083m), with a projected forecast underspend of £4.819m for the end of the year.

1.8  Note, the above figures are predicated on forecasts from Month 4 to the year end and therefore could be subject to change as forecasts are made based on the best available information at this time.

1.9  Note, the Council continues to operate with the Spend Control Panel to ensure that tight financial control and assurance oversight are maintained, and a new financial management culture is being implemented across the organisation through increased scrutiny, such as the Assurance meetings, improved communication and budget manager training from CIPFA.

1.10       Note the full Financial Performance Reports for month 3 (June) and month 2 (May)are provided as appendix 3 and 4 respectively to this report.

1.11       Agree the capital schemes listed in paragraph 6.3 are removed from the Capital Programme as following a detailed review, it has been established that they do not meet capital expenditure criteria. These schemes will be assessed as to whether they are still relevant and if so, whether resources are available to deliver them within the General Fund budget for 2022/23.

Cabinet considered a report, which provided the Council’s annual forecast as at Month 4 (July 2022) for the Council’s General Fund (GF), Housing Revenue Account (HRA) and the Capital Programme (CP). The report formed part of the Council’s financial management process of publicly reporting financial performance against its budgets on a monthly basis.  Reports for Month 2 and Month 3 were attached for information as this was the first Cabinet meeting since the Month 1 position was reported as part of the Opening the Books Cabinet report in July.

The Executive Mayor said that the Opening our Books programme of work was already finding significant issues with the Council’s Budget, which would need to be addressed. He said that this was disappointing, but not unexpected.

The Executive Mayor went on to say that balancing the Council’s books and getting its finances back on track was the top priority for his Administration. The report, he said, set out a worrying but honest appraisal of the Council’s current position as well as a deficit recovery plan, which would deliver an underspend by year end.

In conclusion, the Executive Mayor said that the coming years would be difficult for the Council, but it was a challenge it must rise to.

The Executive Mayor, in Cabinet, RESOLVED that:

1.    To Note the General Fund was projecting a net overspend of £9.483m as at Month 4 (Service directorates were indicating a £24.252m overspend with a £14.769m underspend corporately.)

2.    To note that a further number of risks and compensating opportunities may materialise which would see the forecast year-end variance change (these indicated a net opportunity of £3.290m (risks £9.807m and opportunities of £13.097m) and were reported within Section 3 of this report. Should all these risks materialise, and none of the mitigations be effective, the Council was forecast to overspend by £19.290m. However, if none of the risks materialised and all the opportunities were delivered, the Council would underspend by £3.614m.)

3.    To note the further actions being taken, through development of the Deficit Recovery Plan, to mitigate the projected overspend with a view to eliminating it by the end of the financial year (further details were in paragraph 2.15.)

4.    To approve that the MTFS savings within Table 2b were not deliverable.

5.    To note the Housing Revenue Account (HRA) was projecting an end of year position of a £3.147m overspend, mainly due to inflation in energy costs.

6.    To note the Capital Programme spend to date for the General Fund of £7.882m (against a budget of £112.069m) with a projected forecast underspend of £5.207m for the end of the year.

7.    To note the Housing Revenue Account Capital Programme spend to date of £3.478m (against a budget of £22.083m), with a projected forecast underspend of £4.819m for the end of the year.

8.    To note, the above figures were predicated on forecasts from Month 4 to the year end and therefore could be subject to change as forecasts were made based on the best available information at this time.

9.    To note, the Council continued to operate with the Spend Control Panel to ensure that tight financial control and assurance oversight were maintained, and a new financial management culture was being implemented across the organisation through increased scrutiny, such as the Assurance meetings, improved communication and budget manager training from CIPFA.

10. To note the full Financial Performance Reports for month 3 (June) and month 2 (May) were provided as Appendices 3 and 4 respectively to this report.

11. To agree the capital schemes listed in paragraph 6.3 be removed from the Capital Programme as following a detailed review, it had been established that they did not meet capital expenditure criteria (these schemes would be assessed as to whether they were still relevant and if so, whether resources were available to deliver them within the General Fund budget for 2022/23.)