Issue - meetings

2022/23 Financial Management Report to 31 January 2023

Meeting: 28/03/2023 - Finance Sub Committee (no longer active) (Item 34)

34 2022/23 Financial Management Report to 31 January 2023 pdf icon PDF 166 KB

To scrutinise the Authority’s financial management report to 31 January 2023 (reported to Cabinet on 27 March 2023) setting out the current financial position in the context of the policy priorities in the Our North Tyneside Plan, explaining where the Authority continues to face financial pressures and its plans to address these.

 

Additional documents:

Minutes:

The sub-committee was presented with a report relating to the financial position of the Authority as 31 January 2023 in the context of its policy priorities set out in Our North Tyneside Plan. The report had been considered by Cabinet on 27 March 2023.

 

The Authority continued to see areas of pressure across Adults’ and Children’s Social Care and significant impacts on income particularly across

Sport and Leisure Services, Home to School Transport 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 31 January 2023 the Authority was facing a total pressure on its budget of £22.872m. 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 £8.086m.

 

Whilst officers continued to work with Cabinet to challenge the projected risks and deliver planned efficiencies it was inevitable that there would be a general fund overspend at the year-end. A call on the Strategic Reserve would be required with the recently set 2023/24 budget and Medium-Term Financial Plan providing for a planned replenishment of this reserve through to 2026/27.

 

The report also included details of a small forecast underspend of £0.187m 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 Treasury Management.

 

In response to the sub-committee’s request at its previous meeting, officers presented details of the long-term underlying causes for the financial pressures within the Children’s Services and the action being undertaken to manage these pressures within the Authority’s budget and financial plans. It was reported that there were two strands to this work in terms of reducing demand for support for children in need and reviewing staffing structures and caseloads.  Members asked a series of questions to examine in more detail Children’s Services’ recruitment and retention strategies, its impact on minimising the use of agency staff, the two year plan and associated targets for reducing demand, the capacity within the system to increase the number of in-house placements and the adequacy of government funding to support unaccompanied asylum seekers.  

 

The sub-committee also paid particular attention to the impact of recent increases in the interest rates on the Authority’s borrowing, the reasons for the reduction in the projected variance in the Adult Services budget and the methodology to be used in allocating the Homes for Ukraine Education and Childcare Grant to schools.

 

Officers undertook to provide members of the sub-committee with supplementary information to explain the peak in the amount of rent arrears in week 39 of both 2021/22 and 2022/23.

 

It was agreed that the 2022/23 Financial Management Report to 31 January  2023 be noted.


Meeting: 27/03/2023 - Cabinet (Item 109)

109 2022/23 Financial Management Report to 31 January 2023 pdf icon PDF 166 KB

To receive the fifth 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.

 

Additional documents:

Minutes:

Cabinet considered the fifth monitoring report outlining the 2022/23 financial position.  It provided an indication of the expected revenue and capital financial position of the Authority as at 31 March 2023.

 

The report covered the forecast outturn of the Authority’s General Fund and Housing Revenue Account (HRA) revenue budget including management mitigations where issues had been identified; the delivery of 2022/23 approved budget savings plans; and an update on the Capital Investment Plan, including details of variations and reprogramming, that was recommended for approval.

 

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, which included £7.257m of savings to be achieved in year.

The Authority’s finances were complex in any year given the range of services that were delivered; the picture this financial year was even more volatile given the national and global economic challenges.  At a Service level, before the application of planned contingencies and central funding, the gross pressure would be £22.872m.  However, the budget for the year included contingencies of £6.752m and other central funding of £1.006m.  As a result, the total forecast year-end pressure for the General Fund reduced to £15.114m.  Table 1 sets out the initial variation summary across the General Fund, with a detailed commentary of variances included in Annex 1.

Included within the position for Central Items is £6.752m of contingencies.  Whilst held in Central Items, its use was identified as: £3.116m to offset the pressures in Children’s Social Care; £1.301m was supporting the under achievement of savings targets; and £2.325m to support the inflationary pressures being faced by the Authority.  In September’s report, a £0.316m saving was included reflecting the part year reversal of the national insurance increase along with a £4.927m of Minimum Revenue Provision (MRP) savings following the conclusion of External Audit work into the methodology change; these items remained in the forecasts. In 2021/22 these savings were set aside in a new MRP reserve, which remained on the balance sheet, but it was likely that the in-year saving would be required to support the bottom-line position in 2022/23, so was currently included in the forecast position.  Since the last report to Cabinet, the Authority had received a one-off contribution of £0.405m relating to the Levy Account surplus.  This gave a total underspend for Central Items of £13.407m.

Table 2 added further detail to the information in Table 1.  The top half of table 2 breaks down the forecast £15.114m pressure into the main factors of covid legacy, utility, other inflation, and other pressures. The covid pressures of £7.757m arose primarily from fees and charges income not yet returning to pre-pandemic levels and additional fixed term staff employed to cover increased demand or to enable front-line service provision to continue. 

The lower half of Table 2 included details of funding set aside to support known pressures.  As part of the 2022-2026 Medium-Term Financial Plan (MTFP) agreed by full Council in February, £2.200m  ...  view the full minutes text for item 109