Agenda item

To receive the second budget monitoring report for the current financial year which reflects the latest indication of the potential revenue and capital position of the Authority at 31 March 2022.

Cabinet considered the second monitoring report outlining the 2021/22 financial position.  It provided the latest indication of the potential revenue and capital financial position of the Authority as at 31 March 2022.

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 2021/22 approved budget savings plans; an indication of the impact of Covid-19 on Collection Rates and on the Collection Fund; the implications of Covid-19 for the Authority’s cash position; and an update on the Capital Investment Plan including details of variations and reprogramming that were recommended for approval.

The forecast overall pressure for the General Fund Revenue Account was estimated at £7.420m against the approved net budget. This was made up of a forecasted pressure of £1.813m on normal activities and £5.607m relating to the impact of Covid-19.  The pressure on normal activities in the service was driven mainly by Health, Education, Care and Safeguarding at £7.281m, reflecting the continued pressures in Children’s Services, partly mitigated by the contingency balances that had been created as part of the 2018/19 budget setting process and continued to be held centrally to reflect the on-going pressures in social care being felt locally and nationally.

Included in this projection was £5.720m of pressures in Corporate Parenting and Placements and £1.624m in Integrated Disability and Additional Needs.  The drivers for these pressures continued from 2020/21 and were outlined in the report.

It was anticipated that the outturn forecast for normal activities would improve over the course of the financial year as planned remedial actions began to impact on both expenditure and income.

With regards to the impact of Covid-19, the main drivers behind the £18.420m impact on services were also within Health, Education, Care and Safeguarding where £9.600m was for increased costs to the Authority.  Significant Covid-19 related pressures also existed in Environment, Housing and Leisure (£5.608m) and in Commissioning & Asset Management (£2.012m). 

The report outlined the revenue grants which had been received during June and July 2021.

There was no further update since the August Cabinet meeting on the school funding position.

The Housing Revenue Account was forecast to have year-end balances at 31 March 2022 of £3.058m, assuming all identified Covid-19 related costs and income shortfalls were covered centrally.  The balances were £0.046m higher than budget which had been set at £3.012m, due mainly to the impact of the previous year’s financial performance, but there was also an

in-year estimated underspend of (£0.010m), against an in-year budget of £1.943m.

Universal Credit had been fully implemented across North Tyneside on 2 May 2018.  As of the end of July 2021, 3,484 North Tyneside Homes tenants had moved on to Universal Credit and a team was working proactively with tenants to minimise arrears.  This position would be closely monitored as the year progressed to identify any adverse impacts on the budget position.

The approved 2021-2026 Investment Plan totalled £275.789m (£98.593m 2021/22) and was detailed in the Annex.  The Annex also set out the delivery progress to date, planned delivery for 2021/22, reprogramming and other variations identified through the Investment Programme governance process.

An officer led review of the Investment Plan had resulted in proposals for variations of £2.352m and reprogramming of £12.832m and variations of £2.872m of which more details were set out in the Annex to the report.  The revised Investment Plan stood at £88.113m for 2021/22 and to the end of July 2021 spend of £12.394m had been incurred which represented 14.07% of the revised plan.

The report also outlined progress against the 2021-2025 Our North Tyneside Plan which set out the overall vision and policy context within which the Financial Plan and Budget were set. 

The Authority had plans in place to deliver all elements of the Council Plan and performance against these plans was carefully monitored. The area under most financial pressure was Health, Education, Care and Safeguarding.

In Adult Social Care, as with most local authorities, and in line with the national picture, North Tyneside had seen costs continued to rise.  Along with the number of adults supported increasing over the last few financial years, the individual needs of those residents had increased due to people living longer with multiple complex conditions.  Supporting those needs required more intensive packages of care which were more expensive to provide.  In addition to older people, younger adults with learning disabilities and physical disabilities were also living longer, often with multiple complex issues.

In Children’s Services, good progress continued to be made on engaging with

children in the early years of life to ensure that they were ready for school. 

Safeguarding vulnerable children and maximising their educational attainment

remained key priorities. 

Over recent years, there had been an increase nationally in demand for children’s residential placements but with no corresponding increase in central government funded provision. As such, the levels of looked after children (LAC) and children who required supervision after leaving care continued to generate a significant financial pressure.  Data suggested that, whilst fluctuating, there was a general trend of a steady increase in numbers LAC levels, but there was a wide range of levels of care provided, with more complex cases now being faced.

Cabinet considered the following decision options: either to agree the recommendations as set out in Section 1.2 of the report, or alternatively to disagree with the proposals.

Resolved that (1) the forecast budget monitoring position for the General Fund, Schools’ Finance and Housing Revenue Account as at 31 July 2021, as set out in the Annex to the report, be noted;

(2) the receipt of £2.401m new revenue grants be approved;

(3) the Authority’s Investment Plan spend of £12.394 to 31 July 2021 and the financing of the Plan to the end of the year, as set out in the Annex to the report, be noted; and

(4) the variations of £2.352m (£2.352m for 2021/22) and reprogramming of £12.832m for 2021-22 within the 2021-2026 Investment Plan, as set out in the Annex to the report, be approved.

(Reasons for decision: It is important that Cabinet continues to monitor performance against the Budget, especially given the current level of financial pressures faced by the public sector.)