Agenda item

To present an update on the Council’s 2022/23 forecast revenue budget position and the financial position of the capital programme as at 30^th November 2022 (Month 8), together with the revised capital programme 2022/23 to 2026/27.

Consideration was given to a report of the Director of Finance an update on the Council’s 2022/23 forecast revenue budget position at Annex 1 and the financial position of the capital programme as at 30 November 2022 (Month 8) together with the revised capital programme 2022/23 to 2026/27, as outlined in section two of the report at Annex 2.

The Cabinet Member for Finance and Low Carbon and the Director of Finance presented the report and addressed enquiries of the Committee.

With regard to the Revenue position, the forecast outturn position for 2022/23 is a projected deficit variance of £2.233m after allowing for approved and pending transfers to and from reserves. An operational deficit of £3.233m reduces by £1.000m with the anticipated effect of management actions and strengthened restrictions in relation to expenditure and recruitment. Whilst improving, it is recognised that this remains a challenging position and every effort will be made to reduce the overall variance before the year end.

The position includes additional costs and pressures that have been identified by the Authority in this financial year as a result of the lasting impact of the COVID-19 pandemic. There are currently two areas which continue to endure significant pressures attributed to the on-going impact of the pandemic; Community Health and Adult Social Care is reporting an adverse variance of £5.717m and Children’s Social Care is recording £3.477m. These pressures are 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 £2.806m is being used to reduce the operational pressure. This will 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 is detailed within Annex 1, Section 2.

The forecast pressure of £2.233m at Month 8 is a £2.219m reduction in the adverse position of £4.452m reported at quarter 2 and forecasts the impact of, as previously reported, the management actions that have been strengthened across all service areas to review and challenge planned expenditure, control recruitment and to maximise income. It is therefore anticipated that by the year end, the outturn deficit position should reduce further and that this will be demonstrated in the update report which will be presented to Cabinet at month 9.

Information on the Month 8 position of the Dedicated Schools Grant (DSG), Housing Revenue Account (HRA) and Collection Fund is also outlined in the report.

Against a generally improving position, the DSG is now forecasting an in-year surplus of £3.287m (£3.215m at quarter 2), which has reversed the deficit brought forward leaving a forecast year end surplus of £0.514m (£0.442m at quarter 2). Action will continue to be taken with the aim of mitigating cost pressures and delivering and maintaining a surplus position. To assist, Oldham has been invited by the Government to take part in the Delivering Better Value in SEND (Special Educational Needs and Disabilities) Programme which will 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.

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

The Collection Fund is forecasting an in-year surplus of £0.060m which in turn contributes to an estimated surplus of £4.179m being carried forward into 2023/24. The Collection Fund has been particularly volatile largely as a result of COVID-19. Whilst it is currently in a surplus position, it will continue to be closely monitored throughout the year as any surplus or deficit at the end of the financial year will have a direct budgetary impact in 2023/24.

In relation to the Capital position, the report outlines the most up to date capital spending position for 2022/23 to 2026/27 for approved schemes. The revised capital programme budget for 2022/23 is £59.113m at the close of month 8, a net decrease of £41.135 from the original budget of £100.248m. Actual expenditure to 30 September 2022 was £29.531m (49.96% of the forecast outturn).

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

In response an a query regarding the investment of Reserves, the Director of Finance informed Members that the Council’s Reserves position of £85m puts the Council in a very good position and that the Council’s budget was robust.

RESOLVED: that the following be accepted and commended to Cabinet, the

1. Forecast revenue outturn for 2022/23 at Month 8 being a £2.233m adverse variance having regard to the action being taken to manage expenditure;

2.  Forecast positions for the Dedicated Schools Grant, Housing Revenue Account and Collection Fund; and

3. Revised capital programme for 2022/23 and the forecast for the financial years to 2027/28 as at Month 8.