Issue - meetings

To scrutinise the Authority’s financial management report to 30 September 2022 (reported to Cabinet on 28 November 2022) setting out the current financial position in the context of the policy priorities in the Our North Tyneside Plan, where the Authority continues to face financial pressures and its plans to address these.

The sub-committee was presented with a report which had been considered by Cabinet on 28 November 2022 relating to the financial position of the Authority as 30 September 2022 in the context of its policy priorities set out in Our North Tyneside Plan.

The Authority continued to see areas of pressure across Adults’ and

Children’s Social Care and also significant impacts on income particularly

across Sport and Leisure Services, and Catering Services. The ‘cost of living crisis’ was further increasing demand on the Authority’s services and increasing costs, adding significant financial strain to the Authority’s budgets. Consequently, it was reported that as of 30 September 2022 the Authority was facing a total pressure on its budget of £23.258m. The sub-committee examined details of various mitigations to be applied within the current financial year which together would reduce the in-year pressure to £8.800m.

The report also included details of a small forecast underspend of £0.090m in the Housing Revenue Account, details of the additional grants received by the Authority since the Budget was set, the position so far on the 2022/23

schools’ budgets and schools’ funding, delivery of the Authority’s Investment Plan, the Collection Fund position for 2022/23 and information on Prudential Indicators.

Members of the sub-committee asked a series of question of officers when the following issues were examined in more detail:

a)     the underlying causes of increased demand for adult social care and children’s services and the Authority’s medium term plans to invest in developing and remodelling services to continue to meet needs and reduce financial pressures;

b)     the extent to which the Authority’s Investment Plan had been delivered on time and the likely impact of increased costs of materials on delivery of the plan. Officers confirmed that at the end of September 2022, 26% (£27m) of the plan had been delivered and this was in line with the typical annual delivery profile;

c)    the recent confirmation from the External Auditors that there were no issues with a revised approach to the Minimum Revenue Provision (MRP) calculations, how these would be factored into in-year budget monitoring and its impact on the in-year financial pressure; and

d)    the financial implications of the introduction of voter identification at future elections.

During its deliberations, the sub-committee asked for the following supplementary information to be provided to all its members:

a)     a breakdown of the financial pressures so that members may better understand the root causes of the total pressure on the budget of £23.258m;

b)     an indication of whether the Authority intends to re-instate car parking charges at Quadrant in line with its carbon net zero commitments and to reduce the £0.101m pressure on car parking income; and

c)     a more detailed explanation of the reasons why Democratic and Electoral Services were forecasting a pressure of £0.079m due to the cost of staffing the 2022 elections and canvas.

It was agreed that (1) the 2022/23 Financial Management Report to 30 September 2022 be noted; and

(2) all members of the sub-committee  ...  view the full minutes text for item 19

To scrutinise the Authority’s financial management report to 30 September 2022 (reported to Cabinet on 28 November 2022) setting out the current financial position in the context of the policy priorities in the Our North Tyneside Plan, where the Authority continues to face financial pressures and its plans to address these.

To receive the third budget monitoring report for the current financial year which reflects the first indication of the potential revenue and capital position of the Authority at 31 March 2023.

Cabinet considered the third monitoring report outlining the 2022/23 financial position.  It provided an early indication of the expected revenue and capital financial position of the Authority as at 31 March 2023. The view in this report was expected to change over the coming months as the recovery to a pre Covid-19 position continues, the impact of market conditions became clearer, further inflationary factors became apparent and management actions started to take effect.

The Budget for 2022/23 was approved by full Council at its meeting on the 17 February 2022. The net General Fund revenue budget was set at £163.512m. This included (£7.257m) of savings to be achieved, of which (£3.113m) related to new business cases included in the 2022-2026 Medium-Term Financial Plan, (£1.607m) of full year effect of prior year business cases and (£2.537m) of savings previously achieved by one-off mitigations and non-permanent solutions.

Prior to any mitigation, the Authority’s approved net revenue budget was forecast to outturn with a pressure of £15.500m. Table 1 in section 1.5.2 of the report set out the initial variation summary across the General Fund.

The Authoritycontinued totake aprudent approachto forecastingincluding inrelation to theon-going impactof Covid-19,which currentlywas forecastto addpressures of £5.226m to the General Fund in 2022/23. These pressures were primarily where fees and charges income had yet to return to pre-pandemic levels, where additional fixed term staff were employed to cover increased demand or to enable front-line service provision to continue unimpacted by employees needing to self-isolate. In addition to Covid-19, global market pressures existed around the Authority’s supply chain and currentinflation levels,these combinedadded afurther £7.182mto theoverall pressure. The remaining £3.092m related primarily to staffing and other income related pressures across theservices.

As part of the 2022-2026 Medium-Term Financial Plan (MTFP) agreed by full Council in February £2.200m was set aside from the Change Reserve to support additional pressures in Home to School Transport (£0.400m), Special Educational Needs (£0.400m), additional children’s social care provision (£1.200m) and for the development of the Customer Relationship Management programme (£0.200m). The (£0.400m) relating to Home to School Transport had now been allocated to Commissioning & Asset Management and was reflected in the services projected position, leaving (£1.800m) to support the overall pressure.

In addition to the use of the Change Reserve, £2.000m was also set aside to create a Covid-19 Reserve as part of the 2022-2026 MTFP, this included (£0.650m) to support additional caseloads within Children’s Services, (£0.350m) to support Home to School Transport and (£1.000m) to support reduced fees and charges income following the pandemic. The (£0.350m) relating to Home to School Transport had now been allocated to Commissioning & Asset Management and was reflected in the services projected position, leaving (£1.650m) to support the overall pressure.

Within the 2022-2026 MTFP, (£0.150m) was identified as planned use of the Insurance Reserve to support additional Repairs and Maintenance costs within the Authority’s Commissioning & Asset Management Service Area. The use  ...  view the full minutes text for item 61