Agenda item

Overview of General Fund Revenue Budget 2022/23 - Quarter 1

To consider the report of the Director Finance.

Decision:

Agreed:

RECOMMENDED that Council notes and approves (where applicable):

(1) the General Fund forecast financial position for the 2022 financial year;

(2) the supplementary budgets as detailed in paragraph 8.12 and Appendix 3 of the report;

(3) the outstanding Sundry Debt position as at June 2022;

(4) the creditors payments performance; and

(5) the One Exeter programme update.

Reason for Decision: As set out in the report.

Minutes:

The Executive received the report on the overall financial position of the General Fund Revenue Budgets for the 2022/23 financial year after three months and sought Council approval for additional expenditure required during the financial year.

There had been a significant increase in the cost of living which had a major impact on the Council, with two significant financial pressures identified this year. The first pressure was the proposed pay award, which was £1.5 million more than was budgeted for. The second pressure was the substantially higher energy costs, which, even with the Government’s six-month energy support scheme, it was estimated that the Council would incur an additional cost of £600,000 for energy. This would lead to a considerable overspend of more than £2 million on the budget, which had been partially offset by vacant posts and recruitment difficulties.

Members noted that during the Covid Pandemic, the Council had set aside an earmarked reserve of £4 million for budget changes. The Council would need to use £2 million to keep the General Fund Balance where it should be in the Medium Term Financial Plan. The pressure from the pay award of £1.5 million needed to be addressed ahead of the forthcoming year and the energy cost, if the support cap was not extended, was expected to be £2.25 million more than the current budget.

Particular reference was made to the General Fund working balance which was now expected to stand at £4.5 million and was not currently projected to go below the minimum balance, however work was needed to address the significant financial challenges ahead.

The Director Finance referred to Appendix 4 which showed areas of key budgetary risk, Appendix 5, which outlined the performance against the One Exeter reductions highlighting that the Council was £30,000 lower against the £2.2 million that was expected. Appendix 6 showed the analysis of the progress of the One Exeter Programme against the Medium Term Financial Plan predictions.

Councillor D. Moore, as an opposition group leader, spoke on this item. She enquired if the income generation shown in Appendix 6, would require further budget cuts or whether there would be any potential turn around before the end of the financial year.

The Director Finance clarified that the £2.3 million was from the previous year and was reported against this figure, with a £30,000 shortfall against the £2.3 million. In regards to commercialisation, the One Exeter Programme, was a four year programme with targets set against the end of the programme. There were a number of tenders bid for, which had been unsuccessful which highlighted the challenges faced. There were no requirements for Commercialisation in the One Exeter programme for 2023/24, but additional financial pressures were expected as set out previously.

Councillor Jobson, as an opposition group leader, spoke on this item. She noted that a report would be coming in November and updates to figures could be assessed by Members.

Members thanked the Director Finance and his team for the work they had undertaken. £2.5 million would have a large impact on residents, businesses, and Council services. Having prudent financial management had ensured that earmarked reserves were available.