Agenda item

This report sets out the Revenue and Capital outturn position for Buckinghamshire Council for the financial year 2022/23 as at Quarter 2. The Council was continuing to experience significant financial pressures due to the current economic situation and the high levels of inflation.

The Revenue outturn position as of Quarter 2 was a forecast adverse variance of £1.8m, which was a reduction of £2m from the adverse variance of £3.8m reported at Quarter 1.  Appendix 1 provided detailed information on the revenue forecast outturn by Portfolio. £19.2m of savings were incorporated into the approved 2022-23 Revenue budgets.

Work was ongoing to understand the impact of inflation and how this would affect the capital programme. The current exceptional rates of inflation might have a significant impact on what can be delivered within the approved budget for the year.

RESOLVED -

1)      That the report and the risks and opportunities contained within it be NOTED.

2)      That the following reserve movements be APPROVED:

-          A contribution to a corporate earmarked reserve of £15m of income arising from Energy for Waste electricity sales.

-          A contribution to a corporate earmarked reserve of £4.4m from income arising from a legal dispute regarding third party waste and metals income, and a corresponding contribution from reserves of £4.4m into corporate budgets.

-          A drawdown of £0.15m from the “Mitigating Future Financial Risks” reserve to create an employee hardship fund as approved by the Senior Appointments & Pay Committee (SAPC).

This report sets out the Revenue and Capital outturn position for Buckinghamshire Council for the financial year 2022/23 as at Quarter 2. The Council was continuing to experience significant financial pressures due to the current economic situation and the high levels of inflation. In Adults and Children’s social care, pressures continued to be experienced due to  increased demand and complexity and in Children’s Services the market had become dysfunctional with a lack of suitable placements driving up unit costs.

The Revenue outturn position as of Quarter 2 was a forecast adverse variance of £1.8m, which was a reduction of £2m from the adverse variance of £3.8m reported at Quarter 1.  This reflected the Council’s prudent financial management, successive delivery of targeted savings and strong processes in place to manage risk. There was an adverse variance on portfolio spend of £15.7m (£10.4m forecast at Quarter 1) offset by £13.9 m (£6.6m forecast at Quarter 1) of corporate mitigations which included the use of contingencies and corporate funding, such as interest and a one-off legal settlement of £4.4m.

Appendix 1 provided detailed information on the revenue forecast outturn by Portfolio. £19.2m of savings were incorporated into the approved 2022-23 Revenue budgets. The £15.7m adverse variance in portfolios included £4.7m in Health and Wellbeing from demand pressures, £9.5m in Children’s Services, including £3.2m in placement budgets due to the national lack of available placements and increased demand and complexity of need and staffing costs, £2.1m in Accessible Housing and Resources of which £1.1m was attributable to inflation on energy costs in Property and Assets and £1m of new pressures in Legal and Democratic Services and Insurance, £2m adverse variance in transport services due to increased contract costs and a favourable variance of £3.3m in Climate Change and Environment from additional income from the sale of electricity from the EfW site. Cabinet was being asked to transfer £15m of income arising from this to an earmarked reserve.

Work was ongoing to understand the impact of inflation and how this would affect the capital programme. The current exceptional rates of inflation might have a significant impact on what can be delivered within the approved budget for the year. There was a forecast slippage of £13m which was 8% of the total budget which was within 10% target. The biggest spend was in Education and Children’s Services much of which related to savings against budget and a delay in delivery. Table 3 in the report showed that the Council was on track to deliver 98% of its targeted savings in the current financial year.

The Leader reported that the Council had robust financial management and referred to two other Councils who were facing financial difficulties due to increased demand pressures. The underlying pressure on this Council was currently at £16m which was a serious concern going forwards but was currently being managed through corporate mitigations. Savings on the capital programme was due to savings achieved on the Kingsbrook School.

RESOLVED -

1)      That the report and the risks and opportunities contained within it be NOTED.

2)      That the following reserve movements be APPROVED:

-          A contribution to a corporate earmarked reserve of £15m of income arising from Energy for Waste electricity sales.

-          A contribution to a corporate earmarked reserve of £4.4m from income arising from a legal dispute regarding third party waste and metals income, and a corresponding contribution from reserves of £4.4m into corporate budgets.

-          A drawdown of £0.15m from the “Mitigating Future Financial Risks” reserve to create an employee hardship fund as approved by the Senior Appointments & Pay Committee (SAPC).