Agenda item

To receive the 2022/23 Finance Outturn report.

The Committee received a report that had been considered by Cabinet at its meeting 26 June 2023 in relation to 2022/23 Finance Outturn Report.

The report summarised the financial outturn position for the Authority for the financial year ending 31 March 2023.

The Committee was informed of a number of national accounting matters that have delayed the audit of the 2021/22 Statement of Accounts and consequently the production of the 2022/23 Statement of Accounts.  Therefore, the outturn figures contained in the report were provisional until the completion of the Accounts over the summer.

The Authority continued to see areas of pressure across Adult and Children’s Social Care, in addition to significant impacts on income particularly across Sport and Leisure Services, Home to School Transport and Catering Services.

Further pressures had been experienced in previous financial years, with a number of global issues that had emerged during the financial year, which added significant financial strain to the Authority’s budgets.

In recognition of the pressures, the Authority planned to apply contingencies and central funding to support the position and the balances had been applied to the Service outturn positions.

In January 2023, the Authority reported the gross pressure faced as £22.872m, mitigated to £8.086m with the application of contingencies and central support funding.  The provisional outturn position for 2022/23 was an overspend of £6.081m, an improvement from January of £2.005m. 

It was proposed to deal with the £6.081m overspend via a drawdown from the Strategic Reserve.  After the final transfers, the General Fund Revenue Account showed spend on Budget for 2022/23, with a reduced closing balance on the Strategic Reserve of £6.345m and unchanged General Fund balances of £7.000m.

The 2023-2027 Medium Term Financial Plan and the 2023/24 Budget included a higher than usual level of contingency budgets due to the timing of the Local Government Finance Settlement.  The report set out the proposed allocation of these contingencies, which supports areas of the budget that face significant financial pressure, such as Adult and Children’s social care.  The Authority were now in receipt of the Social Care grant conditions and had applied the funding in line with the national guidance that had been received. 

School balances had decreased from a surplus of £3.398m at the start of the financial year to a deficit of £0.382m as at 31 March 2023.  Within this, 16 schools were in a deficit position. Whilst most of these are marginal deficits, four schools had a deficit totalling £12.459m. 

The Housing Revenue Account (HRA) had year-end balances of £3.315m.  The HRA showed an underspend of £0.185m against the in-year 2022/23 Budget, together with a £0.061m improvement in the budgeted brought forward balances, which cumulatively brought the HRA to £0.246m better than the budgeted position for 2022/23. 

The initial approved Investment Plan for 2022/23 was £64.431m.  Net variations and reprogramming of £22.885m were approved by Cabinet during 2022/23 to give a revised Investment Plan of £87.316m.  Capital expenditure for the year was £77.442m (88.69% of the revised plan).  The outturn included reprogramming of £9.781m and variations relating to gateway approvals and grant determinations of £1.698m for the 2022-2027 investment plan.

A member raised in relation to the need to use reserves and questioned to the level to be replenished within the 2023/24 year. The Head of Finance informed that the ongoing level would be in the region of £4m.

Another member raised their concern of the need to use reserves and questioned what activity was ongoing to mitigate further use. In response the Head of Finance stated that through the budget planning for 2024/25, officers had been tasked to identify a number of projects that would mitigate any further use of reserves.

Members question what activity was being undertaken to reduce schools deficits. In response the committee was informed of the support being provided to schools to aid the management of their budgets. The committee was also informed that a report was to be considered by Cabinet to plan how the issues could be addressed.

A member questioned the reasons for the reprogramming of projects within the investment plan. In response the committee was informed that projects go through regular monitoring with the Strategic Project group who challenges the process.

A member raised the reason of the overspend in relation to fleet management. The Head of Finance agreed to arrange for a written response to be provided.

A member questioned the reason for the income shortfall in relation to the former Swans site. The Senior Business Partner informed that income target was set on the site being fully occupied and there were some vacancy within the site. The member stated that the target should be reviewed.

A member requested clarification in relation to benefits processing and the drop in income recovery. The Head of Finance agreed to arrange for a written response to be provided.

In relation to the interest rate forecast, members questioned the interest rate view within the report and what was the expected level at the year end. The Head of Finance agreed to arrange for a written response to be provided.

The report detailed the agreement to finalise commercial arrangements for the return of services to the Authority from its partner Equans. A member asked for further information and comparative cost to the Authority if the services were not returned. The Head of Finance agreed to arrange for a written response to be provided.

It was Agreed that (1) the 2022/23 Outturn Report be noted; and (2) the further information requested be circulated to all members of the Committee.