Agenda item

Budget Monitoring - Outturn 2022-23

Decision:

The report set out the Revenue and Capital outturn position for Buckinghamshire Council for the financial year 2022/23.

The Council was continuing to experience significant financial pressures due to high levels of inflation and continued increase in demand and complexity in key services, such as Adults Social Care and Children’s Social Care. Portfolio budgets had seen unavoidable pressures in areas such as energy inflation, in the cost of placements for looked after children, in Adult Social Care, Temporary Accommodation and provision of Home to School Transport, with an adverse variance of £9.8m across portfolio budgets at financial year end. Despite these pressures, the Council had managed to achieve a balanced revenue position overall, due to the effective processes in place for managing financial risk; pressures in portfolio budgets had been managed overall and mitigated by a favourable variance in corporate budgets.

One of the recommendations proposed the following transfer to reserves:-(paragraph 2.4 (b)(vii))

· a transfer of £0.5m to the Collection Fund reserve from additional grant income from Business Rates levy surplus;

· a transfer to the Highways Reserve of £0.5m to fund Highways lining;

· a transfer of £4.7m to the Mitigating Future Financial Risks reserve.

The final year end position on capital was spend of £107.5m against a budget of £151.9m, and against total released budget of £129.9m, equating to 17% variance against released budgets. Capital projects which were successfully completed this year included Kingsbrook Secondary School, Brunel Shed in Wycombe (which had now been leased out), the £1.8m DEFRA-funded Rural Broadband installation programme, the Berryfields and Haydon Hill Cycleways, upgrades to the Southern Waste Depot, a roof replacement on Bedgrove Community Centre, 7 School toilet projects, and SEN placement projects in Shortenhills, Holmer Green Senior School, Westfield and Princes Risborough Upper School.

Many capital projects had been impacted by the current challenging economic situation, with high levels of construction inflation, pressures in the labour market, supply shortages and delays to acquisitions causing slippage in the programme. This was reflected in the relatively high levels of slippage, but low level of overspends. Where necessary, projects were being reviewed and re-scoped and funding implications were being considered.

The final outturn variance of £44.3m consisted of slippage into future years of £53.8m, accelerated spend ahead of profile of £16.3m, overspends of £4.0m, and underspends of £10.9m which would be released for other purposes. Cabinet was requested to approve the carry forward of slippage to future years and accelerated spend as detailed in the Cabinet report.

RESOLVED:

1) That the report and success in achieving an overall balanced revenue outturn position for 2022-23 be NOTED.

2) That an increase to the Revenue Contribution to Capital Reserves (RCCR) of £0.6m be APPROVED to fund an update to the CCTV Control Room.

3) That the transfer to reserves as set out in paragraph 2.4 (b)(vii) of the Cabinet report be APPROVED.

4) That the overall Capital outturn position of £107.5m of investment in Council capital priorities be NOTED.

5) That the carry-forward of slippage and accelerated spend be APPROVED, as detailed in the Cabinet report.

Minutes:

The report set out the Revenue and Capital outturn position for Buckinghamshire Council for the financial year 2022/23.

The Council was continuing to experience significant financial pressures due to high levels of inflation and continued increase in demand and complexity in key services, such as Adults Social Care and Children’s Social Care, but however managed to have a balanced budget at year end due to robust financial management. Portfolio budgets had seen unavoidable pressures in areas such as energy inflation, in the cost of placements for looked after children, in Adult Social Care, Temporary Accommodation and provision of Home to School Transport, with an adverse variance of £9.8m across portfolio budgets at financial year end. Despite these pressures, the Council had managed to achieve a balanced revenue position overall, due to the effective processes in place for managing financial risk; pressures in portfolio budgets had been managed overall and mitigated by a favourable variance in corporate budgets due to contingencies set aside to manage risk, interest income and income from the energy from waste incinerator.

The biggest overspends by portfolio were £4.9 million in children’s social care due to the lack of national placements, £4.7 million in homelessness and regulatory services from a significant increase in demand for temporary accommodation, £3.2 million in transport services due to increased contract costs in home to school transport, £2.4 million in health and wellbeing due to demand and fee uplifts, £2.1 million in accessible housing and resources mainly due to inflation on energy costs for council properties. On the other hand, there was a favourable variance of £7.2 million in climate change and environment from additional income from the sale of electricity from the energy to waste site. On savings the Council achieved 96% of the £19.2 million savings.

One of the recommendations proposed the following transfer to reserves:-(paragraph 2.4 (b)(vii))

· a transfer of £0.5m to the Collection Fund reserve from additional grant income from Business Rates levy surplus;

· a transfer to the Highways Reserve of £0.5m to fund Highways lining;

· a transfer of £4.7m to the Mitigating Future Financial Risks reserve.

The final year end position on capital was spend of £107.5m against a budget of £151.9m, and against total released budget of £129.9m, equating to 17% variance against released budgets compared to the target of 10%. Capital projects which were successfully completed this year included Kingsbrook Secondary School, Brunel Shed in Wycombe (which had now been leased out), the £1.8m DEFRA-funded Rural Broadband installation programme, the Berryfields and Haydon Hill Cycleways, upgrades to the Southern Waste Depot, a roof replacement on Bedgrove Community Centre, 7 School toilet projects, and SEN placement projects in Shortenhills, Holmer Green Senior School, Westfield and Princes Risborough Upper School.

Projects and Programmes that have slipped included the Future High Streets project (£9.6m) as the core original project for this funding (the Curve) fell through this year and was in the process of being replaced by a proposal for the Tesco site at Eden Centre, plus slippage of contract and acquisition payments on approved projects and also a project delay for the Aylesbury HIF Grid Reinforcement (£7.9m) due to finding an alternative site as the original site had been allocated for housing.

In terms of unsecured debt over 90 days there has been an increase of £0.2m across quarter 4 rising from £9m to £9.2m but still within the £10 million KPI. In terms of payment performance the overall invoice payment performance was 95.8% paid on time up 1.9% from Q3.

The Leader welcomed the balanced budget commenting that many other Councils were facing extreme financial difficulties. This Council had a reputation for its strong financial management despite the challenges that were being faced. Additional income from the energy to waste plant and income generated from an increase in interest rates helped balance portfolio pressures.

During questions the following points were noted:-

A Cabinet Member welcomed the budget and returning money back to reserves of £4.7 million, almost 10% of the Council’s reserves at the moment.
Reference was made to sundry debt which was £22.3m, an increase of £2.7m from Q3 with £17.8 m unsecured. The Service Director of Finance commented that they were following normal processes in terms of chasing debt and there was nothing there currently which was of concern. This figure also took account of the historic position and bad debt positions would be tested. There was a good profile and good procedures in place to recover that money.
A comment was made on the successful completion of capital projects such as the Kingsbrook Secondary School, Brunel Shed in Wycombe, the £1.8m DEFRA funded Rural Broadband installation programme, the Berryfields and Haydon Hill Cycleways, upgrades to the Southern Waste Depot and a roof replacement on Bedgrove Community Centre amongst other projects. The Council was delivering physical improvements to residents on infrastructure despite the cost-of-living crisis for example street lighting costs had gone up by £1.8 million due to increased energy costs and also inflationary pressures were impacting on a number of portfolios.
The Cabinet Member for Homelessness and Regulatory Services reported on the £4.7m adverse variance in Housing which was mainly due to pressures of £4.5m from Temporary Accommodation demand and cost increases. The year ended with nearly 250 families in expensive hotel accommodation, some of whom were Ukrainian or Afghan refugees. To try and manage demand the Service Area had opened Bridge Court in High Wycombe and were looking at other alternative forms of accommodation.
The Cabinet Member for Children’s Services and Education reported that her Service area was always in deficit because of the nature and demand of their work but the number and complexity of cases were increasing, which was a national problem, including shortage of placements. There was very careful financial management of this portfolio.