Agenda item

(Finance – Cllr.J Philip) -To note the Quarter 2 budget monitoring report for 2022-23 – (C-031-2022-23).

1.              The Cabinet noted the General Fund revenue position at the end of Quarter 2 (30th September 2022) for 2022/23, including actions being undertaken or proposed to improve the position, where significant variances have been identified, (including Appendix A of the report).

2.              The Cabinet noted the General Fund capital position at the end of Quarter 2 (30th September 2022) for 2022/23 (including Appendix B of the report).

3.              The Cabinet noted the Housing Revenue Account revenue position at the end of Quarter 2 (30th September 2022) for 2022/23, including actions proposed to ameliorate the position, where significant variances have been identified; and

4.              The Cabinet noted the Housing Revenue Account capital position at the end of Quarter 2 (30th September 2022) for 2022/23 (including Appendix C of the report).

The Finance Portfolio Holder introduced the report. He noted that the report set out the 2022/23 General Fund and Housing Revenue Account positions, for both revenue and capital, as at 30th September 2022 (“Quarter 2”).

In terms of General Fund revenue expenditure – at the Quarter 2 stage – a budget overspend of £1.259 million, with projected net expenditure of £16.890 million against an overall budget provision of £15.631 million, was forecast.

As with Quarter 1, the Quarter 2 position was dominated by a range of substantial spending pressures, most notably:

•           Inflation/Staff Budgets – a sharp increase in UK inflation since the budget was set is driving higher pay demands across both the public and private sectors. The Pay Settlement for 2022/23 was finalised in November 2022 with staff receiving an uplift of £1,925 at all pay grades, which equates to an average pay award in the region of 5.0% rather than the 2.0% award assumed in the budget. However, this is still being offset – to a large extent – by salary savings due to vacant posts. Senior officers are trying to contain net spending on staff salaries within budgeted cash limits for 2022/23, although it is a pressure that will have to be addressed in setting the budget for 2023/24; and

•           Local Plan – the continued delay in finalising the Local Plan was causing a major shortfall in income received from Planning Applications. It was also a major factor in the delayed drawdown of Qualis loans due to planning delays on key development sites in the district; this is leading to a shortfall in income that the Council assumed from loan margins in the budget.

The current economic difficulties were also creating a range of other problems with inflation impacting on energy and contract costs, with rising interest rates also working against the Council.

Decision:

1.              The Cabinet noted the General Fund revenue position at the end of Quarter 2 (30th September 2022) for 2022/23, including actions being undertaken or proposed to improve the position, where significant variances have been identified, (including Appendix A of the report).

2.              The Cabinet noted the General Fund capital position at the end of Quarter 2 (30th September 2022) for 2022/23 (including Appendix B of the report).

3.              The Cabinet noted the Housing Revenue Account revenue position at the end of Quarter 2 (30th September 2022) for 2022/23, including actions proposed to ameliorate the position, where significant variances have been identified; and

4.              The Cabinet noted the Housing Revenue Account capital position at the end of Quarter 2 (30th September 2022) for 2022/23 (including Appendix C of the report).

Reason for Decision:

This report facilitates the scrutiny of the Council’s financial position for 2022/23.

The comments made at this Committee, where relevant, will be reported to Cabinet for consideration at their meeting on 12th December 2022.

Other Options:

There are no matters for decision in this report. The Committee is asked to note the contents but may choose to take further action depending on the matters reported.