To receive the fourth budget monitoring report for the current financial year which reflects the indication of the potential revenue and capital position of the Authority at 31 March 2022.
Cabinet considered the fourth 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. This report was an interim view and it was expected this would change over the coming months as the recovery from Covid-19 continued.
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; and an update on the Capital Investment Plan including details of variations and reprogramming that were recommended for approval.
The budget for 2021/22 was approved by full Council at its meeting on the 18 February 2021. The net General Fund revenue budget was set at £150.154m. This included £4.537m of savings to be achieved, all of which had been identified in previous years.
The forecast overall pressure for the General Fund Revenue Account was estimated at £5.247m against the approved net budget. This was made up of a forecasted pressure of £1.306m on normal activities and £3.941m 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 £7.284m, 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 £5.097m of pressures in Corporate Parenting and Placements and £1.564m 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 £19.318m impact on services were also within Health, Education, Care and Safeguarding where £12.037m was for increased costs to the Authority. Significant Covid-19 related pressures also existed in Environment, Housing and Leisure (£3.850m) and in Commissioning & Asset Management (£2.528m).
The report outlined the revenue grants which had been received during August and September 2021.
The latest position in respect of Schools Funding was provided in the Annex to the report. Schools were required to submit their rolling three-year budget plan by 31 May each year. The total planned deficit for 2021/22 was £3.902m. The Authority had been working with schools for a number of years with regard to long-term strategic issues of surplus secondary places and the associated financial pressures, which continued to be compounded by rising employment costs. The provisional outturn for the year ended 31 March 2021 showed a surplus of £3.721m, which revised the trend of deficits over the previous few years.
As well as school balances being forecast to reduce overall, some individual schools continued to face significant financial challenges. There were six schools with deficit budget plans for 2021/22, all of which continued to be deficit following 2019/20. The High Needs Block ended 2021/21 with a pressure of £8.880m. The latest forecast of the budget position for 2021/22 indicated an anticipated in-year pressure of £3.763m reflecting a further rise in demand for special school places.
The Housing Revenue Account was forecast to have year-end balances at 31 March 2022 of £3.426m, assuming all identified Covid-19 related costs and income shortfalls were covered centrally. The balances were £0.414m 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 (£0.378m), 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 November 2021, 3,716 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 £292.639m (£90.719m 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.
The monthly monitoring of the Investment Plan had resulted in proposals for variations of £4.028m and reprogramming of £6.134m of which more details were set out in the Annex to the report. The revised Investment Plan stood at £87.528m for 2021/22 and to the end of November 2021 spend of £31.772m had been incurred which represented 36.30%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
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 continue 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
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 of LAC, but there was a wide range of levels of care provided, with more complex cases now being faced.
Resolved that (1) the forecast budget monitoring position for the General Fund, Schools’ Finance and Housing Revenue Account as at 30 November 2021, as set out in the Annex to the report, be noted;
(2) the receipt of £4.805m new revenue grants be approved;
(3) the Authority’s Investment Plan spend of £31.772m to 30 November 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 £4.028m (£0.031m for 2021/22) and reprogramming of £6.134m 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.)