Agenda item

Financial Performance 2022-23 - Position at the end of June 2022

The purpose of the report is to ensure that the Cabinet is informed of the current financial position for the Council against the Budget for 2022-23 (Appendix J).

Financial Performance 2022-23 - Position at the end of June 2022

RESOLVED that:-

(a) Cabinet note the services projected overspend of £4.813 million and the assumptions outlined in the report;

(b) Cabinet agree the inflationary increase that will be awarded in relation to home to school transport contracts to cover fuel inflation and backdate it to April 2022;

(c) Cabinet agree the increase for commissioned home care providers to enable them to pay the staff who use their own cars a mileage rate of £0.45 per mile (increased from £0.25 per mile) with effect from 1 September 2022.  The increase will be funded from existing resources within the service;

(d) Cabinet note the potential overspend of £17.135 million following the employer’s pay award, utility and fuel inflation;

(e ) Cabinet note the following actions which will be implemented with immediate effect in order to help bring the budget back in line and minimise/contain the overspend:

·       The Council will be inviting applications from staff for voluntary redundancy. 

·       The normal budget approval process is now suspended, and all expenditure will be authorised by Executive Directors.  A pro forma has been issued and all managers needing to spend will be expected to complete a business case to justify the expenditure and obtain formal sign off.

·       There is now a freeze on in-year contingency requests and the balance on the contingency will be utilised to offset the inflationary increases and potential overspend

·       Whilst there will not be a moratorium imposed in relation to recruitment to vacant posts, a vacancy panel will be established where all requests to recruit to posts will be considered.  The vacancy panel will then make recommendations to the Executive Team who will make the ultimate decision.

·       The Executive Team will look selectively to increase fees and charges?in year.  Any proposals deemed necessary will be referred to Cabinet for a formal decision.

·       The Executive Team has been reminded and will instruct all managers to be proactive and ensure “good housekeeping”; e.g. ensure that all of their suppliers are on the supplier incentive scheme, review contracts and request better value from their suppliers.

·       The capital programme is being reviewed particularly in relation to contract price inflation.  Once this exercise is complete then the cost of capital and debt charges (borrowing) will be examined to establish any potential for an in-year revenue budget underspend to offset the impending Council overspend. 

·       All capital projects going ahead will be contained within their existing approvals even if it means revisiting the scope of the project.  Value engineering will be considered as well as a reduction to or a deferral of each project.?

(f) Cabinet approve re-profiling to the Capital Programme of £41.706 million from 2022-23 to 2023-24 to reflect estimated expenditure levels in the current financial year;

(g) Cabinet approve the new grants and amendments to existing grants at Appendix A and the required changes to the budgets;

(h) Cabinet note the progress on the delivery of the approved savings at Appendix B;

(i) Cabinet note the use of the contingency shown at Appendix Q;

(j) Cabinet note the use of reserves shown at Appendix R;

(k) Cabinet note the virements requested by services shown at Appendix S; and

(l) Cabinet note that the outcome of the strategic review of Advance Northumberland will be reported to the November Cabinet meeting and will include a request to commission external advice on the group structure and financial model.