Issue - meetings

Revenue & Capital Budget Monitoring, Cash Limits and Virements – April to September 2022

Meeting: 10/11/2022 - Cabinet (Item 50)

50 Revenue & Capital Budget Monitoring, Cash Limits and Virements – April to September 2022 pdf icon PDF 864 KB

The attached report presents the financial monitoring information for the Authority as a whole for the financial year 2022/23, using information available as at the end of September 2022.


Additional documents:


Cllr Richard Samuel introduced the report, moved the officer recommendation and made the following statement:


“It was astonishing to me, when I took office, that the previous administration failed to produce quarterly budget statements. I was clear that every quarter needed to be reported to ensure transparency but also that management actions to deal with problems with budgets was initiated.


Today’s report I regret to say reflects the extremely difficult financial environment all councils are operating under at present.


We are expecting that, without direct intervention, the council is on course to overspend its budget by £4.5m this financial year.


There are four areas of variance causing this problem:


·  Surging demand for Children’s Services and the very high costs of placement accommodation charged by the private sector. A £5.4m overspend is expected.

·  Contract inflation, passing on the high levels of inflation in the national economy now exacerbated by Kwarteng’s disastrous foray into free market economics.

·  Hikes in energy costs.

·  The impact of the nationally agreed local government pay settlement creating £2.2m of unbudgeted pressure.

These pressures are mitigated to some extent by strong income from Heritage and the Commercial Estate and Parking.


I am not prepared to reach year end with such a deficit and so the management team have been requested to establish a range of measures to control and reduce in year spending, which will be managed through a Recovery Board reporting to me and the Leader. Measures such as a vacancy freeze, and limits on discretionary spending can be expected. I will report the impact of these measures to the February Cabinet meeting.


Finally, it is not all bad news. I can report that the 22/23 savings target is largely on schedule to be met.


There are some specific virements to note together with the changes to the capital programme. It is also pleasing to note that the increased costs for repairing Cleveland Bridge will not fall on local taxpayers as it has been met by external grant.”


Cllr Tom Davies seconded the motion and made the following statement.


“Colleagues, many of the financial and service demand pressures - especially in children’s services, highlighted in the Medium Term Financial Strategy have manifested themselves in the current year and are reflected in this quarter two monitoring report.

And I would just like to pause and reflect on the scale of some of these challenges - take children’s services, for example, with the report showing a 38% increase in the number of children in residential placements from 2021/22. This is just one example of the nature of additional service pressures which the Council is currently facing as we work to support our residents and community at this time.

My colleague, Richard Samuel, has provided further context and detail behind our current financial position, but I would again note that the Council’s leadership has already taken action to put a framework in place, through the Financial Recovery Board, to manage these pressures and work over this next quarter to  ...  view the full minutes text for item 50