Decision details

Consideration as given to a report of the Director of Finance which provided the Cabinet with an update on the Council’s 2022/23 forecast revenue budget position at Annex 1 of the report and the financial position of the capital programme as at 31 December 2022 (Quarter 3) together with the revised capital programme 2022/23 to 2027/28, as outlined in section two of the report at Annex 2 of the report.

Revenue Position

The forecast outturn position for 2022/23 was a projected deficit variance of £1.280m after allowing for approved and pending transfers to and from reserves. An operational deficit of £2.055m reduced by £0.775m with the anticipated effect of management actions and strengthened restrictions in relation to expenditure and recruitment. Whilst improving, it was recognised that this remained a challenging position and every effort would be made to further reduce the overall variance before the year end.

The position included additional costs and pressures that had been identified by the Authority in this financial year because of the lasting impact of the COVID-19 pandemic. There were currently two areas which continued to experience significant pressures attributed to the on-going impact of the pandemic; Community Health and Adult Social Care was reporting an adverse variance of £5.717m and Children’s Social Care was recording £3.555m. These pressures were being offset against a corporate provision of £12.000m COVID-19 Legacy funding which was set aside during the 2022/23 budget setting process specifically to mitigate the on-going costs of the pandemic. The residual balance of £2.728m was being used to reduce the operational pressure. This would be monitored for the remainder of the financial year with action taken to address variances and take mitigating action as detailed in the report.

An update on the major issues driving the projections was detailed within Annex 1,

The forecast pressure of £1.280m at Quarter 3 was a £0.953m decrease to the adverse position of £2.233m reported at month 8 and forecasted the impact of, as previously reported, the management actions that had been strengthened across all service areas to review and challenge planned expenditure, control recruitment and to maximise income.

Information on the Quarter 3 position of the Dedicated Schools Grant (DSG), Housing Revenue Account (HRA) and Collection Fund was also outlined in the report.

Against a generally improving position, the DSG was forecasting an unchanged in-year surplus of £3.287m, which reverses the deficit brought forward leaving a forecast year-end surplus of £0.514m. Action would continue to be taken with the aim of mitigating cost pressures and delivering and maintaining a surplus position. To assist, Oldham had been invited by the Government to take part in the Delivering Better Value in SEND (Special Educational Needs and Disabilities) Programme which would provide dedicated support for the SEND Review reforms to 55 Local Authorities with historical DSG deficit issues with the aim of putting the DSG of participating Authorities on a more financially sustainable footing. Working with partners, detailed work had commenced on compiling the grant application for submission in late June/ early July.

There were currently no significant issues of concern in relation to the HRA.

The Collection Fund was forecasting an in-year surplus of £0.060m which in turn contributed to an estimated surplus of £4.179m being carried forward into 2023/24. The Collection Fund had been particularly volatile largely because of COVID-19. Whilst currently in surplus, the position would continue to be closely monitored throughout the year as any surplus or deficit at the end of the financial year wiould have a direct budgetary impact in future financial years.

Capital Position

The report outlined the most up to date capital spending position for 2022/23 to 2027/28 for approved schemes. The most recent estimated revised capital programme budget for 2022/23 was £50.361m, a net decrease of £49.887m from the original budget of £100.248m. The most recently recorded expenditure level was £44.073m (87.51% of the forecast outturn).

It was likely that the forecast position will continue to change as the year draws to a close with additional re-profiling into future years.

Options/alternatives considered

Option 1 – To consider the forecast revenue and capital positions presented in the report including proposed changes

Option 2 – To propose alternative forecasts

RESOLVED – That:

1.    The forecast revenue outturn for 2022/23 at Quarter 3 being a £1.280m adverse variance having regard to the action being taken to manage expenditure be noted.

2.    The forecast positions for the Dedicated Schools Grant, Housing Revenue Account and Collection Fund be noted

3.    The revised capital programme for 2022/23 and the forecast for the financial years to 2027/28 as at Quarter 3 be noted.