Agenda item

The Executive Director – Core Services and Service Director – Finance (Section 151 Officer) submitted a report which contained the financial performance of the Authority during the first quarter ended 30th June 2022 and assessed the implications against the Council’s Medium-Term Financial Strategy (MTFS).

It was reported that a forecast for a year-end overspend of in the region of £13.7M comprised of the exceptional items referenced as part of setting the 22/23 budget (£10.9M), together with unanticipated overspends across several Council departments which had arisen during the quarter (£2.8M).

In the ensuing discussion particular reference was made to the following points:

·         The Council was confident that it would keep the overspend at agreed levels to ensure that the Council’s plans as set out in the MTFS would be kept in place. It was explained that the £10.9M was an overspend that the Council had already anticipated for, whereas the £2.8M was an additional overspend in this quarter that was not previously forecasted. Gross forecasts were used in detailed financial planning, whereas the purpose of the MTFS was contemplation and building transformation into the Council plan therefore gross figures were not presented. Directorates such as Children’s Services were experiencing pressures that were mirrored nationwide and therefore it was difficult to ascertain unanticipated costs in this area. The Government had not announced additional funding for Local Authorities however it could be the case that the new administration would explore this. In future planning, the aim would be to look at the full year impact on underspending and balance.

·         In regard to the SEAM project funding, it was explained that the funds are separate from the MTFS and therefore no further additional financial risk is attached to this project, and it would not be a net drain on the Council. Members were advised that a report on the costs of the SEAM project and the different funding revenues involved could be brought to the Committee at a later date.

·         The Executive Director - Core Services provided assurance from a Senior Management Team perspective that the MTFS was one of the two biggest agenda items alongside the Cost-of-Living Crisis. Executive Directors would draw up action plans to mitigate these overspends as far as was possible, which would be submitted to Cabinet as part of the Q2 performance management update.

·         The council tax collection rate remained good, and the assumption was that this would continue for the rest of the year. However, the Council would like to meet its stretch targets for both Council Tax and Business Rates and would therefore continue to monitor both closely.

·         Improvements to the energy efficiency ratings of Berneslai Homes properties via the Housing Energy Efficiency Programme (HEEP) are funded through the Housing Revenue Account. The Housing Revenue Account is a ring-fenced account of certain defined transactions relating to Local Authority housing within the General Fund and therefore would not impact the Council’s MTFS. The HEEP is a national government requirement in which homes need to be brought up to standard by 2030, with an estimated £58M cost for Barnsley Council stock.

·         Project Capital Spending was reported to be £4m for three months and £15m for nine months which was based on evidence from Q1. The Council would manage any financial risk surrounding this.

·         Members were informed that when writing off historic debts, the Council only write off debts when they are not economically viable to collect.

·         Questions arose regarding agency costs and their contribution to the overspend compared to the previous year. The data would be collated, and this information would be provided to the committee.

RESOLVED

(i)            That the Corporate Finance Report Q1 be noted

(ii)          That information regarding SEAM project funding be provided to the Committee; and

(iii)         That the Committee be provided with information on agency costs.