Consideration was given to a report of the Director of Finance which report Cabinet with 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 2027/28, as outlined in section two of the report at Annex 2.
The forecast outturn position for 2022/23 was a projected deficit variance of £2.233m after allowing for approved and pending transfers to and from reserves. An operational deficit of £3.233m reduced by £1.000m 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 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 as a result of the lasting impact of the COVID-19 pandemic.
There were currently two areas which continued to endure 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 £3.477m. 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 £2.806m 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, Section 2.
The forecast pressure of £2.233m at Month 8 was a £2.219m reduction in the adverse position of £4.452m reported at quarter 2 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. It was therefore anticipated that by the year end, the outturn deficit position should reduce further and that this would be demonstrated in the final monitoring 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 was also outlined in the report.
Against a generally improving position, the DSG was now forecasting an in-year surplus of £3.287m (£3.215m at quarter 2), which had reversed the deficit brought forward leaving a forecast year end surplus of £0.514m (£0.442m at quarter 2). Action would 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 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 as a result of COVID-19. Whilst it was currently in a surplus position, it will continue to be closely monitored for the remainder of the year as any surplus or deficit at the end of the financial year will have a direct impact in 2023/24.
The report outlined the most up to date capital spending position for 2022/23 to 2027/28 for approved schemes. The revised capital programme budget for 2022/23 was £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 was likely that the forecast position would continue to change as the year drew to a close with additional re-profiling into future years.
The Month 8 Revenue Monitor and the Capital Investment Programme 2022/23 report was presented to the Policy Overview and Scrutiny Committee on 26 January 2023 to accompany the suite of 2023/24 budget reports. The Committee was content to note the report and commend it to Cabinet for approval.
Option 1 – To approve the forecast revenue and capital positions presented in the report including proposed changes
Option 2 - To approve some of the forecasts and changes included in the report
Option 3 – Not to approve any of the forecasts and changes included in the report
RESOLVED – That:
1. The 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 be approved.
2. The Forecast positions for the Dedicated Schools Grant, Housing Revenue Account and Collection Fund be approved.
3. The revised capital programme for 2022/23 and the forecast for the financial years to 2027/28 as at Month 8 be approved.