Agenda item

Q3 Budget Monitoring Report 2022-23

Decision:

Cabinet received a report which set out the Revenue and Capital outturn position for Buckinghamshire Council for the financial year 2022/23 as at Quarter 3. The Council was continuing to experience significant financial pressures due to the current economic situation and the high levels of inflation.  Although the rate of inflation had reduced recently and was forecast to reduce further by the end of the 2023 calendar year, the Council’s budgets were continuing to experience ongoing pressures from inflation and energy prices, and also particularly in Adults and Children’s social care due to increased demand and complexity of demand. In addition, in Children’s Services the market had become sub?optimal with a lack of suitable placements driving up unit costs.

 

The Revenue outturn position as of Quarter 3 was a forecast balanced position, which was an improvement from the adverse variance of £1.8m reported at Quarter 2.  Appendix 1 provided detailed information for each Portfolio and relating to the forecast revenue budget outturn and information about performance relating to overdue debts and late payments of commercial debt.

 

The Revenue outturn position as of Quarter 3 was a balanced position, which was an improvement from the adverse variance of £1.8m reported at Quarter 2.  The key areas of movement in the forecast variance from the Quarter 2 position were detailed at paragraph 1.8 of the Cabinet report, and related to:

Forecast variance Quarter 2

£1.8m adverse

Health & Wellbeing – reduction of £2.1m in the adverse pressure to £2.7m (£4.8m last quarter). Although there have been increased demand pressures, corporate contingency budget of £3.3m has been released to mitigate pressures and additional government funding of £1m has been received from the Hospital Discharge fund.

(£2.1m)

Education and Children’s Services – reduction of £2.8m in the adverse variance from £9.5m to £6.7m. This reflects revised staffing forecasts and maximisation of grant funding to reduce pressures.

(£2.8m)

Homelessness & Regulatory Services – an increase of £3.1m from an adverse variance of £0.8m to £3.9m due to a significant increase in demand for Temporary Accommodation, particularly nightly accommodation. Temporary Accommodation has now been escalated to a Key Financial Risk. Although the budget for 2023/24 has been increased to meet additional demand, work is progressing apace to develop a more sustainable solution.

£3.1m

Transport – increase of £1.4m in the adverse variance related to Home to School Transport from £2m to £3.4m due to inflationary pressures on contractors.

£1.4m

Accessible Housing and Resources – improved position in Property and Assets due to revised forecasts for rental income.

(£0.7m)

Other – minor movements in Culture & Leisure, Planning and Regeneration and Leader.

(£0.3m)

Corporate and Funding – although the overall movement is an improvement of £0.4m, within this there are some significant movements in forecast due to £3.3m of contingency released into Health & Wellbeing budgets, a further £2.4m of contingencies forecast to be released to offset pressures, £0.7m of additional interest income due to increases in interest rates, and £0.5m surplus of income relating to the reversal of the 1.25% increase in National Insurance effective from November.

(£0.4m)

Forecast variance Quarter 3

£0.0m

 

Paragraph 1.9 of the Cabinet report detailed information within the overall position of the adverse variances on Portfolio spend of £14.3m (£15.7m forecast at Quarter 2) that was offset by £14.3m of corporate mitigations (£13.9m forecast at Quarter 2).  £19.2m of savings had also been incorporated into the approved 2022?23 Revenue budgets.  Overall, there was a shortfall of £0.6m against this target, attributable to delays in the Revenues and Benefits system implementation in the Accessible Housing and Resources portfolio, and £407k overspend in the placements budget.  Additionally, the £250k Agency Staff saving had not been achieved. Trading with schools was forecast to increase by £43k more than the target.

 

The Cabinet report also detailed information on external funding where the Council had been successful in obtaining additional funding during the financial year from external grant funding.

 

At Q3, the overall forecast capital outturn was £30.7m (21.0%) less than the capital cash limit for the year.  The position as reported was subject to approval of a number of in?year changes to the approved capital programme. These had been through the appropriate internal governance boards and were pending a further Cabinet Decision.  This was also an increase in net slippage of £17.7m compared with the Q2 position.  Further details of the delivery of the capital programme for each portfolio were in Appendix 1.

 

RESOLVED –

 

(1)               That the current forecast outturn for the financial year 2022/23, and the associatedrisks and opportunities, be NOTED.

 

(2)               That a drawdown from the Mitigating Future Financial Risks Reserves to fund a further contribution of £150k to the Staff Hardship Fund be APPROVED, as agreed by the Senior Appointments and Pay Committee (SAPC) on 1 February 2023.

Minutes:

Cabinet received a report which set out the Revenue and Capital outturn position for Buckinghamshire Council for the financial year 2022/23 as at Quarter 3. The Council was continuing to experience significant financial pressures due to the current economic situation and the high levels of inflation.  Although the rate of inflation had reduced recently and was forecast to reduce further by the end of the 2023 calendar year, the Council’s budgets were continuing to experience ongoing pressures from inflation and energy prices, and also particularly in Adults and Children’s social care due to increased demand and complexity of demand. In addition, in Children’s Services the market had become sub?optimal with a lack of suitable placements driving up unit costs.

 

The Revenue outturn position as of Quarter 3 was a forecast balanced position, which was an improvement from the adverse variance of £1.8m reported at Quarter 2.  Appendix 1 provided detailed information for each Portfolio and relating to the forecast revenue budget outturn and information about performance relating to overdue debts and late payments of commercial debt.

 

The Revenue outturn position as of Quarter 3 was a balanced position, which was an improvement from the adverse variance of £1.8m reported at Quarter 2.  The key areas of movement in the forecast variance from the Quarter 2 position were detailed at paragraph 1.8 of the Cabinet report, and related to:

Forecast variance Quarter 2

£1.8m adverse

Health & Wellbeing – reduction of £2.1m in the adverse pressure to £2.7m (£4.8m last quarter). Although there have been increased demand pressures, corporate contingency budget of £3.3m has been released to mitigate pressures and additional government funding of £1m has been received from the Hospital Discharge fund.

(£2.1m)

Education and Children’s Services – reduction of £2.8m in the adverse variance from £9.5m to £6.7m. This reflects revised staffing forecasts and maximisation of grant funding to reduce pressures.

(£2.8m)

Homelessness & Regulatory Services – an increase of £3.1m from an adverse variance of £0.8m to £3.9m due to a significant increase in demand for Temporary Accommodation, particularly nightly accommodation. Temporary Accommodation has now been escalated to a Key Financial Risk. Although the budget for 2023/24 has been increased to meet additional demand, work is progressing apace to develop a more sustainable solution.

£3.1m

Transport – increase of £1.4m in the adverse variance related to Home to School Transport from £2m to £3.4m due to inflationary pressures on contractors.

£1.4m

Accessible Housing and Resources – improved position in Property and Assets due to revised forecasts for rental income.

(£0.7m)

Other – minor movements in Culture & Leisure, Planning and Regeneration and Leader.

(£0.3m)

Corporate and Funding – although the overall movement is an improvement of £0.4m, within this there are some significant movements in forecast due to £3.3m of contingency released into Health & Wellbeing budgets, a further £2.4m of contingencies forecast to be released to offset pressures, £0.7m of additional interest income due to increases in interest rates, and £0.5m surplus of income relating to the reversal of the 1.25% increase in National Insurance effective from November.

(£0.4m)

Forecast variance Quarter 3

£0.0m

 

Paragraph 1.9 of the Cabinet report detailed information within the overall position of the adverse variances on Portfolio spend of £14.3m (£15.7m forecast at Quarter 2) that was offset by £14.3m of corporate mitigations (£13.9m forecast at Quarter 2).  £19.2m of savings had also been incorporated into the approved 2022?23 Revenue budgets.  Overall, there was a shortfall of £0.6m against this target, attributable to delays in the Revenues and Benefits system implementation in the Accessible Housing and Resources portfolio, and £407k overspend in the placements budget.  Additionally, the £250k Agency Staff saving had not been achieved. Trading with schools was forecast to increase by £43k more than the target.

 

The Cabinet report also detailed information on external funding where the Council had been successful in obtaining additional funding during the financial year from external grant funding.

 

At Q3, the overall forecast capital outturn was £30.7m (21.0%) less than the capital cash limit for the year.  The position as reported was subject to approval of a number of in?year changes to the approved capital programme. These had been through the appropriate internal governance boards and were pending a further Cabinet Decision.  This was also an increase in net slippage of £17.7m compared with the Q2 position.  Further details of the delivery of the capital programme for each portfolio were in Appendix 1.

 

The Leader paid tribute to the robust financial management of the budget, particularly as some Councils nationally were facing problems with debt. Portfolio areas were significantly overspent by £14.3 million which had been affected by interest rate changes but this had been balanced out by income generation. Another Cabinet Member reported that this pressure was likely to continue over the next year or two and the Council could be faced with some difficult financial decisions. Reference was made to the substantial savings the Council had already made and also would make this year within the budget however given the pressure on expenditure by adults and children’s services and education services, achieving those future savings was a challenging job.

 

RESOLVED –

 

(1)               That the current forecast outturn for the financial year 2022/23, and the associatedrisks and opportunities, be NOTED.

 

(2)               That a drawdown from the Mitigating Future Financial Risks Reserves to fund a further contribution of £150k to the Staff Hardship Fund be APPROVED, as agreed by the Senior Appointments and Pay Committee (SAPC) on 1 February 2023.

Supporting documents: