The Director of Finance will submit a report (Document “S”) 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 September 2022. It states the Council’s current balances and reserves and school balances. 

Recommended –

That Members review and comment on the Qtr 2 Finance Position Statement for 2022-23.

(Andrew Cross - 07870 386523)

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

This report was the second monitoring report presented to Members on the Council’s 2022-23 financial position. It provided the forecast revenue and capital financial position of the Council at the 31st March 2023. The report covered:

The forecast outturn of the Council’s revenuebudget in 2022-23

The forecast financial impact of inflation in 2022-23

A statement on the Councils reserves

An update on the Capital Investment Plan.

The Councils Risk Register.

Main financial messages included in the report revealed that, based on a projection at September 30th 2022, the Council was forecast to overspend the £388.5m net revenue budget by £45.3m by March 31st 2023, That figure was £10.6m lower than the £55.9m forecast overspend at Qtr1 overall, and there were some very significant changes as outlined in the report. 

It was reported that the main overspending areas continued to be Children’s Social Care due to high placement costs; high levels of Agency Staff, and unachieved savings.

Members were reminded that the Council was also facing some very severe challenges as a result of inflationary pressures which totalled c£33m.  The challenges included £14m of additional forecast costs associated with the 2022-23 pay award offer. Overall it was estimated that the employer offered pay award would cost c£20m compared to the £6m budgeted to pay for a 2%. pay award and the figure could end up being even higher depending on national pay negotiations.

The other major inflationary costs related to energy prices which were estimated to increase by 118% by suppliers at Quarter 1.

Departmental commentaries and mitigating actions taken to reduce the forecast overspend were presented.

Following a detailed presentation Members raised a number of issues and questions to which the following responses were provided:

·         It was expected that the development of the Children’s Trust would cost in the region of £3.2 million.  It had been confirmed that Department of Education would fund that cost.

·         Agency costs of £32 million were forecast across the Council, £24 million of which were for Children’s Services.  The costs of consultant fees were not available at the meeting and it was agreed that these would be provided after the meeting.

·         The Council’s Reserves Statement included a number of statutory funds reserved for specific purposes including school balances which could not be utilised elsewhere. The list was being refined to identify amounts which were available for other purposes. Councils which spent 5% of the general fund reserve would be considered to be no longer sustainable.

·         Government guidance was awaited on funding to be awarded via the Better Care Fund.  It was likely that a condition of the funding would be that it should be used to maintain care worker over the Christmas period. 

·         It was explained that no patient should leave hospital without an assessment, however, 80% of patients discharged themselves and some did slip through the assessment process.  A grant provided to ensure patients could leave hospital as soon as possible had expired but the Council did not stop supporting residents when the funding ceased.  Conversations were being held with the health service to ensure costs were shared. 

·         The number of staff receiving honorariums; their pay grades and the length of time the honorarium had been in place was not readily available at the meeting.  It was agreed that Members would be provided with that information after the meeting. 

·         A decision had been made by the Corporate Management Team (CMT) that a vacancy freeze would not be imposed and managers retain their flexibility to appoint.  Savings reported from unfilled vacancies were where replacement staff did not commence employment after a person left their employment or where managers had felt that they could wait for a month or so to recruit. 

·         The Ukrainian refugee programme provided £10,000 per refuge.  The funding was used to support assessment work required to ensure the suitability of hosts; support for school places and basic school provision such as uniform.  Some of the funding was also required to find suitable housing. The government was no longer providing the same level of funding for refugees and as aconsequence the funding target was falling short and adding pressure not just on the Housing Service but also on Adults and Children’s Services.  The costs per refugee was not factored as a specific cost in the accounts but would be identified in other services.  It was agreed to investigate if those amounts could be specifically identified.  

·         Income generated from the Clean Air Zone covered all costs.  The government had provided funding for initial set up costs so the scheme was cost neutral.  Exceptions were in place for some vehicles including minibuses for specialist transport and prevented the costs falling to other services. 

·         The Street Lighting Programme, scheduled for completion in 2025, had been brought forward and was 60% complete.  The capacity of contractors and availability of luminaires had delayed further progress but the programme was already making savings.

·         The Covid pandemic had resulted in an increase in the number of school pupils recorded as receiving Elective Home Education (EHE).  A number of pupils had since been encouraged to return to school, however, some families had got into the habit of not sending children to school and to prevent repercussions had recorded those children as EHE.  From September 2023 it would be mandatory to register those pupils and for checks to be made.  It was explained that Children’s Services in Bradford had, for some time, carried out those checks.  If children were felt to be at risk or known to social workers the service worked with those social workers to ensure that there was the parental capacity available for those EHE pupils. Care plans would be put in place if necessary and children returned to school.

Resolved –

(1)  That members reviewed and commented on the Quarter 2 Finance Position Statement for 2022-23.

(2)  The Committee thanks Strategic Directors for their attendance.

(3)  The Committee requests that the Health and Social Care Overview and Scrutiny Committee considers a report relating to hospital discharges and the processes between Health Services, Adults and Social Care, as well as the financial implications.

ACTION:  Strategic Director, Health and Well Being.