Agenda item

Financial Monitoring 2022-23


The Committee considered the Financial Monitoring Report, which summarised the projected outturn position for the Council’s General Fund (GF) revenue account and Housing Revenue Account (HRA), based on the latest actual and accrued data to date.


This was an early insight mid-way through the financial year during a period of macro-economic uncertainty caused by seismic global and domestic factors which were changing rapidly.  The report identified issues which must be immediately addressed, but also pressures which would vary in intensity during the year and would require a flexible and evolving response.


Officers were projecting a net budget shortfall on the GF revenue account of £3.3 million, which could potentially be met in year by financial discipline and a transfer from unearmarked reserves.  £1.7 million of the shortfall related to current inflationary pressures and of that £1.6 million related to projections of utility costs on leisure centres.  The report had set out: the detail behind these variations; areas for concern including a potential salary budget discrepancy and economic uncertainty; and actions to mitigate these risks.


The Corporate Management Board was currently implementing measures to address the budget gap in 2022-23 and the initial actions were set out in the budget pressures report considered by this Committee at its meeting on 29 September.  As some of those measures would be one-off in-year adjustments, further action would be prioritised in the mid-year review of the Medium-Term Financial Plan which would be reported to the Committee in November.


The Council was currently forecasting to have £46.4 million in General Fund reserves at the end of the year and currently, £3.6 million of this was not earmarked for other purposes.


The surplus on the HRA would enable a projected transfer of £7.2 million to the new build reserve and meet the forecasted £2.5 million to the reserve for future capital at year-end. 


Progress against significant capital projects on the approved programme as outlined in section 7 of the report was underway.  The Council expected to spend £97 million on its capital schemes by the end of the financial year. 


The Council’s underlying need to borrow to finance the capital programme was expected to be £50.84 million by 31 March 2023, against an estimated position of £104.28 million.  The lower underlying need to borrow was a result of slippage on both the approved and provisional capital programme, as detailed in paragraphs 7.2 to 7.7 of the report.


The Council held £131 million of investments and £279 million of external borrowing on 31 July, which included £147 million of HRA long-term loans.  Officers confirmed that the Council had complied with its Prudential indicators in the period, which were set in February 2022 as part of the Council’s Capital and Investment Strategy.

During the debate, the Committee noted the following comments:


·       In response to a request for clarification of the likely impact on utility costs of the Government’s announcement on 21 September of a cap on the unit price for electricity for businesses and whether it would also apply to local authorities, officers indicated that no further detail on this had been received from the government. Once the detailed information was received officers would carry out sensitivity analysis in respect of the Council’s energy costs and circulate the findings to all councillors.

·       Concern over increasing costs of delayed schemes in the capital programme.

·       Concern over impact on the Council’s finances of the increasing cost of borrowing, particularly under the Public Works Load Board.

·       Concern over impact of cost-of-living crisis on social housing tenants and their ability to pay their rent.

·       Request that any future update from Arlingclose on the economic impact of the current financial situation as it affects the Council which is relevant to this discussion be circulated to all councillors. 

·       Request that future reports clarify the extent to which debts were overdue.

·       Concern that there was a high proportion of overdue debt with no payment plan.  

The Committee


RESOLVED: That the Council’s financial monitoring for the financial year 2022-23 to date be noted and the Executive be asked to note the Committee’s comments and observations referred to above.



To allow the Committee to undertake its role in relation to scrutinising the Council’s finances.



Officer to action:

To circulate to the Committee:


(a)   Details of sensitivity analysis in respect of the Council’s energy costs once the detailed information on any cap on unit prices was received

(b)   any future update from Arlingclose on the economic impact of the current financial situation as it affects the Council, particularly in terms of interest rates and impacts on vulnerable residents




Executive Head of Finance



To ensure that future reports clarify the extent to which debts were overdue and further information as to the reason why a high proportion of overdue debt has no payment plan.  


Executive Head of Finance



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