Agenda item

2023/24 Budget Planning Report for Services within the Remit of the Finance & Corporate Services Select Committee


The Interim Financial Planning Manager and Head of Finance – CF and Finance introduced the report detailing the draft revenue budget and capital programme for the services within the remit the Committee.


Key points from the report were highlighted, including details of the financial pressures generated by the ongoing exceptional inflationary environment, legacy Covid–19 impacts, cost of living crisis all leading to a doubling of the Council’s saving requirement for 2023/24 from £10m to £20m.  It was reported that the balanced budget was presented as part of the Consultation Budget to be achieved through a combination of efficiency savings and increases in council tax and fees and charges.


Budget proposals for 2023/24 had been prepared in the context of a wider strategy addressing the five-year MTFF period.        The latest monitoring position for the 2022/23 financial year reported a net underspend of £61k which would leave uncommitted General Balances at £26,780k entering the 2023/24 financial year.


The Committee noted that Cabinet would consider the budget proposals on 16 February 2023 and the report would include comments from Select Committees. Members were informed that Council would meet to agree the 2023/24 budgets and Council tax levels on 23 February 2023.


Further clarity was requested on government grants and business rates income failing to match prevailing levels of inflation currently and in the medium term. It was explained that when the financial position was reviewed, funding and the costs of running services was considered. 75% of service expenditure is proposed to be funded from business rates and council tax in the Consultation Budget. The remaining 25% comes from government grants, with the provisional settlement being published on 20 December 2022, which was consistent to the Consultation Budget.


Members requested reassurance on the savings proposals and the impacts that these would have on business performance and support teams, service maintenance, service delivery and business transformation. It was noted that the Council had undergone in-depth reviews of different service areas and although the figures were substantial, service delivery and the impact on residents had been considered, with no reduction in the quality of the Council services expected from the proposals.


In terms of the capital investment plan and the requirement of 59 million pounds of extra borrowing to 2027/28, Members were informed that the capital programme had significantly reduced over the past few years and maximising resources had been considered. The items in the capital programme had been reviewed to ensure that they were fit for purpose for residents. The higher interest rates were driving significant movements on the Council’s cost of borrowing.


It was noted that fees and charges was expected to generate an additional £204k in the portfolio and further information was requested on the examples of the fees and charges currently under review. Services being considered included the registrar office and blue badges incomes generated within the contact centre.


During Member questions it was noted that the Council held general and earmarked reserves and they were in place to protect the Council from risk. The Council undertook detailed monthly budget monitoring to manage risks which and this was also reported to Cabinet where savings and delivery of services were considered.


In relation to financial management and covid legacies, the Committee was informed that covid legacies resided in social care and related to additional demand during the pandemic. The main area of funding impacted by covid legacies was the council tax reduction scheme. There were two changes proposed to the council tax reduction scheme including an increased charge for non-dependents living in properties and an increase in rewards from £1 to £2. 


It was expected that inflation would go up to 10% in 2022/23 and 2023/24 before returning to 4% over the remainder of the Council’s budget strategy. It was queried what plans were in place to mitigate the impact if inflation did not come reduce in line with forecasts. The Council begun to see an increase in inflation during outturn for 2021/22 and a decision was made to earmark underspends within the revenue position to increase Council reserves and resilience, with this position being monitored closely throughout 2022/23. Management of this pressure has involved close working with different service areas across Procurement, Finance and service staff, with mitigating action taken through the monthly monitoring process. There would still be some money available as earmarked reserves had not been fully used.


The Committee understood the situation over the next few years and the impacts of covid legacies. The budget adequately set out a plan and continued to put residents first whilst providing a high quality of service. The Committee noted that there were risk management mechanisms in place that need continued monitoring.


The Committee agreed the following comments to be put forward to Cabinet:


The Committee noted the report, accepted the balanced proposed budget and that the Council would continue to monitor and maintain a risk register.


RESOLVED: That the Committee noted the budget projections contained in the report and commented on the combined budget proposals affecting the relevant service areas within the Finance and Corporate Services Cabinet Portfolios, within the context of the corporate budgetary position.


Supporting documents: