The Director of Finance will submit a report (Document “I”) which provides Members with an update on the forecast year-end financial position of the Council for 2022-23.

It outlines the revenue and capital budgets and the year-end financial position based on information at the end of May 2022. It states the Council’s current balances and reserves and school balances. 

Recommended –

That the Executive

(1)       Note the contents of this report and the actions taken to manage the issues highlighted.

(2)       Approve the following capital expenditure schemes as outlined in section 11.8 and 11.9. to Document “I”:

• £0.23m for new enforcement camera equipment. This will be funded by invest to save borrowing.

• £1.427m additional budget for the completion of Highways works. This will be funded by WYCA grant and £0.28m Council borrowing.

• £0.085m to improve the process of managing medicines in care homes. This will be funded by the General Contingency Budget. 

• £0.213m to complete essential works at the Beckfield Resource Centre. This will be funded by the General Contingency Budget. 

• £6.8m to continue with the core IT Refresh Programme. This capital project has previously been approved and was held as a ‘reserve’ scheme pending the final case being presented.

• £0.25m for ensuring that the appropriate charging infrastructure is in place to support the change in the Council fleet to electric vehicles. This will be funded by a mixture of invest to save and corporate borrowing.

Overview and Scrutiny Committee: Corporate

(Andrew Cross - 07870 386523)

The Director of Finance submitted a report (Document “I”) which provided Members with an update on the forecast year-end financial position of the Council for 2022-23.

It outlined the revenue and capital budgets and the year-end financial position based on information at the end of May 2022. It also stated the Council’s current balances and reserves and school balances. 

Based on a projection at the May 28th 2022, the Council is forecasted to overspend the £388.5m net revenue budget by £55.9m in 2022-23.

c£20m of this is due to the expected extraordinary impact of inflation above budgeted levels.

The Council approved a budget increase for inflation of c£22m for 2022-23, to pay for a 2% pay award; the impact of National Insurance increases, National Living Wage increases, contract price inflation based on CPI inflation of 4% and Energy price inflation 5%.

The largest forecast overspend is c£33m in Children’s Services as a result of continuing increases in agency staffing costs and increased Child Looked After Placements, both of which have increased very significantly in recent years.

The Department of Place also has a number of pressures and is forecast to overspend by £8.9m, with the main issues being Street lighting energy costs (£3.7m), and a £2.4m forecast overspend in Waste Services due in part to higher waste tonnages and recycling income losses which were supported by Covid funding in 2021-22 that has now ceased (£1.2m), and inflationary cost increases above those budgeted (£1.2m). Additionally, there are undelivered savings in Sport and Culture, and on-going pressures in Housing and Markets amongst others.

The Leader stated that this was a challenging report for the Council and that Services were stretched across a number of areas; in particular, the pressures in Children’s and Adults Social Care were acute and reforms were crucial as a way out of the current situation.

The Children’s and Family Portfolio Holder added that despite the additional funding added to the Budget; the significant rise in the cost of placements for Looked After Children and the reduction in the number of foster carers, as well as the continuing reliance in agency staff, meant cost pressures remained.

The cost in providing specialist placements were significant, depending on need, although there had been a concerted effort to try and provide more care in residential settings this had not always been possible and ultimately the needs dictated the type of setting suitable for an individual.

The Leader acknowledged that the cost of specialist provision had risen significantly and this was a national issue, which Government had to address.  In relation to Adult Social Care she added that the Council was working closely with our NHS partners to ensure that more and more people stayed and received care in their own homes for longer.

The Regeneration, Planning and Transport Portfolio Holder stated that the replacement of street lighting to more energy efficient units was progressing well and that the programme would result in significant savings both in terms energy use and maintenance costs.

The Director of Finance stated that the budget setting process had already started in earnest and further details will be contained in the Medium Term Financial Strategy report in September.

The Leader stressed that in the context of the cost of living crisis and the rise in inflation, the impact on the district will be significant and that Government needed to recognise this.

A main opposition group Councillor expressed concerns in the significant rise in the cost of placement costs for Looked After Children and the resulting impact on the overall overspend in Children’s Services and he ascertained what contingency measures were in place to deal with this.  In response it was stated that this was a national issue, with the growth in the numbers of LAC coming into the system and work was ongoing to identify the reasons behind this growth and how support can be provided locally or within their own homes.

In addition, for children with complex needs, there was an acute shortage of suitable provision which was driving up costs and placing pressures on the budget.

Resolved –

(1)      That the contents of Document “I” and the actions taken to        manage the issues highlighted be noted.

(2)      That the following capital expenditure schemes as outlined in   section 11.8 and 11.9. to Document “I” be approved:

•           £0.23m for new enforcement camera equipment. This will be     funded by invest to save borrowing.

•           £1.427m additional budget for the completion of Highways works.       This will be funded by WYCA grant and £0.28m Council borrowing. 

•           £0.085m to improve the process of managing medicines in care           homes. This will be funded by the General Contingency Budget.  

•           £0.213m to complete essential works at the Beckfield Resource           Centre. This will be funded by the General Contingency Budget.  

•           £6.8m to continue with the core IT Refresh Programme. This capital project has previously been approved and was held as a ‘reserve’ scheme pending the final case being presented. 

•           £0.25m for ensuring that the appropriate charging infrastructure is     in place to support the change in the Council fleet to electric vehicles. This will be funded by a mixture of invest to save and        corporate borrowing. 

(3)       That the work being undertaken to mitigate the ongoing budget           pressures be addressed in the Medium Term Financial Strategy report.

ACTION: Director of Finance

Overview and Scrutiny Committee: Corporate