Issue - meetings

Report of the Cabinet Member for Finance and Communities is attached.

Councillor Gold, Cabinet Member for Finance and Communities outlined the forecast financial position of the Council at the end of the first quarter of the 2022/23 financial year based on information known on 30th June 2022. The report sets out the position for both revenue and capital and provides an analysis of the variances, both under and overspending.

Councillor Gold highlighted that as at the end of quarter 1 there is a projected forecast yearend deficit of £1.5 million on the revenue budget and this is before utilisation of the utilities reserve of £1.5 million. The highest areas of overspend is within the One Commissioning Organisation which is £2.5 million, Operations at £1.1 million and Children’s £1 million. These are however offset by an underspend of £3.6 million of which £2.5 million is on borrowing costs due to rephasing.

A member sought clarity on how the quarter 2 outcomes are looking now we are nearing this period. In response, Sam Evans, Section 151 Officer advise that we now have confirmation of the pay award, rising pressures in Children’s Services and we are in negotiations with Yorkshire Purchasing Organisation who we purchase our gas and electricity through. The One Commissioning Organisation pressures are not changing significantly, and the Persona savings are being taken into the next financial year.

A member questioned if financial modelling has taken place against the cost of borrowing, in response Sam Evans did advise that this is currently taking place and the rephasing will be included in the quarter 2 Cabinet report.

A member questioned if it is correct to assume it is cheaper to run 3 Knowsley Place than Bury Town Hall. In response Councillor Gold responded to confirm this is correct but the Town Hall will show the positive effects of the window replacement scheme soon and its important to note we lease 3 Knowsley Place but we own the Town Hall and it is £682,000 per annum and subject to a 3 year review. In addition, it was requested that the costings of the temporary boiler system be provided to the Committee

A member sought assurances on the delivery of savings; it was stated that there is a forecast delivery against the total savings (target of £18.9 million) is £15.46 million. It was asked what is being done to close the gap and ensure the required savings are made. Councillor Gold assured the Committee regular meetings discussing the delivery of savings and holding Executive Directors to account takes place.

Discussions took place regarding the Airport Dividend receipt is now pushed back to 2026/27. Sam Evans, Section 151 Officer advised how interest incurred through the loan borrowed is covered. Discussions are currently taking place regarding the recovery and when the repayment can commence.

It was agreed:

1.    The play area and park strategy to be circulated to members of the Committee

2.    Councillor Jones questions and answers submitted before the meeting will be circulated with the minutes for members to view

3.    Further information on  ...  view the full minutes text for item 9

Report of the Cabinet Member for Finance and Communities is attached.

Councillor Richard Gold, Cabinet Member for Finance and Communities, presented the report which provided an update on the Treasury Management function throughout 2021/22 including the Council’s capital expenditure and financing, the treasury position as 31st March 2022, the investment and borrowing strategy, and the borrowing and investment Outturn.

Decision:

Cabinet approved, for onward submission to Council on the 21st of September, the:

·         2021/22 Prudential and Treasury Indicators

·         Treasury Management 2021/22 Outturn Report

Reasons for the decision:

It is a requirement of the CIPFA Code that the Council receives an annual Treasury Management Outturn Report.

Alternative options considered and rejected:

N/A

Report of the Cabinet Member for Finance and Communities is attached.

Councillor Richard Gold, Cabinet Member for Finance and Communities, presented the report which outlined the forecast financial position of the Council at the end of the first quarter of the 2022/23 financial year based on information known on 30th June 2022. The report sets out the position for both revenue and capital and provided an analysis of the variances, both under and overspending.

Members discussed the report, noting the increasing costs of fuel and utility services which would affect future budgets. It was agreed that Bury were not the only one in this position and it was hoped that a Government solution would be introduced. In response to a query over the vacancy factor, it was noted this was not a target but reflected the typical turnover of the Council and was common practice in Local Authority finances. It did not include services where agency staff were needed to cover vacancies, and it was positive that monitoring matched predictions.

Decision:

Cabinet:

1.    Noted the forecast overspend of £1.509m within the revenue budgets at quarter 1 and the need for Directorates to continue to work with their finance managers to maintain tight budgetary control and identify mitigating actions and deliver these to ensure services work within their budgets. It should be noted that this is a forecast only at this stage and is before the utilisation of the £1.5m utilities reserve but also before the full impact of the pay award for 2022/23 is taken into account which could increase costs over and above those budgeted by a further £1.6m;

2.    Noted the use of the reserves in line with the criteria and one-off departmental priorities;

3.    Noted forecast delivery of the 2022/23 MTFS savings as agreed by Council in February 2022;

4.    Noted the position on the Dedicated Schools Grant, Collection Fund and the Housing Revenue Account;

5.    To approve an overall increase in the capital programme of £8.020m, as a consequence of new and updated external grant allocations and additional external funding secured by 30th of June;

6.    Noted the current position on the capital programme and that a further update will be brought to Cabinet in quarter 2 in respect of forecast spend this financial year; and

7.    Approved the extension of the current Insurance contract by 12 months.

Reasons for the decision:

To ensure the Council’s budgetary targets are achieved.

Alternative options considered and rejected:

This report is in accordance with the Council’s financial procedure regulations.

Report of the Cabinet Member for Finance and Communities is attached.

Councillor Richard Gold, Cabinet Member for Finance and Communities, presented the report which set out the final financial position for the Council for 2021/22. The report sets out the position for both revenue and capital and provides an analysis of the variances, both under and overspending. On revenue, Members noted that the revenue budget underspent by £0.667m. This net underspend comprises individual departmental overspends and underspends. The largest individual departmental overspend was on Children and Young People, mainly on staff costs for social care and safeguarding, as well home to school transport. The most significant underspend was on non-specific services, driven by reduced capital financing costs and the return from investing in Manchester Airport. On capital, Members noted that there was a £45.736m outturn against a budget of £49.464m. This is after the 2021-22 budget was reprofiled, so that £57.734m budget was transferred into the 2022-23 financial year.

Members discussed the report, welcoming the underspend but querying the variance from budgeted expectations. Councillor Gold agreed and advised that this had been an unusual year and that budgets were monitored throughout the year to mitigate unforeseen surprises.

Decision:

Cabinet:

1.    Noted the 2021-22 final underspend on the revenue budget of £0.667m, against a budget of £171.9m. It should be noted that this budget, whilst mainly funded from Council Tax and Business Rates income, also included funding of £5.2m from earmarked reserves and a £7.732m contribution from General Fund Balances;

2.    Noted that a £2.5m additional contribution was made to the pooled fund in 2021-22. There will be a further additional contribution of £2m, which will be paid over in 2022-23, at which point all contributions will balance to the Section 75 agreement across the term;

3.    Noted the final position on the collection fund was a surplus on Council Tax and a deficit on Business Rates. The main cause of the Business Rates deficit was the granting of additional reliefs after the budget was set. These reliefs were granted by the Government to offset the impacts on businesses of the pandemic. The Council’s cost of the Business Rates deficit will mainly be met from compensatory Government grants;

4.    Noted the that the final position on reserves and balances is £114.035m at the end of 2021/22 (excluding schools balances and matched funds). The £114.035m is split between £70.743m general reserves and £43.287m earmarked reserves. The schools net reserve balance is (£12.627m) which is made up of £8.846m individual schools surplus balances less £21.473m deficit on the central Dedicated Schools Grant which is subject to a formal deficit recovery programme;

5.    Noted expenditure of £45.736m on capital programmes during the year; and

6.    Noted the capital spend of £45.736m against a budget of £49.464m. The resulting underspend of £3.728m, combined with funding adjustments of £0.656m, enables a carry forward into 2022/23 of £4.384m. This report includes the recommendation to approve a capital budget carry forward for £4.384m.

Reasons for the decision:

To note the final financial position for the Council for 2021/22.

Alternative  ...  view the full minutes text for item 55