Agenda item

Report of the Executive Director of Corporate Resources and Customer Services

The Committee considered the report of the Executive Director of Corporate Resources and Customer Services, which explained that to comply with statute, the Chief Financial Officer was required to report to Council prior to the approval of the budget and the setting of the Council Tax, to give assurance that the budget was robust and that there were adequate reserves and balances.

The report explained that the budget for 2022/23 had been developed whilst the Council continued to deal with the ongoing financial impact of the COVID pandemic on a number of key services and income sources; that this impact would continue for years to come and the understanding of impact and identification of mitigation measures was a key feature of the 2022/23 budget and would be a key feature of budgets to come, thus increasing the complexity of budget setting and also the financial pressure on the Council as this would impact financial sustainability; that as with the previous financial year, developing a robust set of budget estimates for the financial year 2022/23 had been incredibly difficult and both these estimates and the risk profile of the Council would continue to change fundamentally over the next 12 months; and that the budget proposed however, represented the most accurate position that was available at the current time and like during the financial year 2021/22, regular updates would be required to be presented to Cabinet and Council in order that informed decision making could take place during the year in order to maintain financial sustainability.

With regard to the Council’s core budget the report advised that over the last 12 months, the Council budget for 2021/22 included a number of short term financial measures and support to mitigate the financial implications of the pandemic and that a number of these were met via central government support provided for a specific purpose and some required Council support; that moving into 2022/23 a lot of this support would come to an end and the budget estimates had had to be updated to take account of the longer term impact of the pandemic on key services and income streams, with continued uncertainty around whether this impact was permanent or temporary; and that the areas of the Council’s budget where a residual impact remained and consideration had been given to it in this budget included:

·       Business Rates Income;

·       Council Tax Income;

·       Adult Social Care Budget;

·       Children’s Social Care Budget;

·       Leisure Income; and

·       Cost of Waste Disposal

The report detailed the following factors had been considered as part of the budget process for 2022/23:

·       Impact of Previous Years’ Budget - 2021/22

·       Central Government funding

·       Maintaining Service Delivery

·       Inflation and Annual Cost Increases

·       Financial Management

·       CIPFA Financial Resilience Index and the CIPFA Financial Management Code

·       Management of Risk

·       Capital Strategy and Strategic Investment

·       External Advice

Regarding the Reserves Strategy 2022/23 the report provided information on:

·       The General Fund

·       National considerations such as the impact of economic climate on Council costs and anticipated reductions in Government funding

·       Local considerations such as planned changes in service delivery methods / contracts; the impact of rising demand for services; legal challenges; and balance sheet risk

·       Budget setting assumptions such as sensitivity of the budget assumptions and the Council’s significant earmarked reserves

·       Management / Member actions including the provision of clear corporate / Member messages and the three-year Medium-Term Financial Plan and One-year budget

·       Earmarked reserves

·       Capital reserves

·       School reserves

The report concluded that as a result of consideration of the issues contained within the report, the budget proposed was a robust budget package and the opinion provided was in accordance with Section 25 of the Local Government Act 2003. 

This report would also be considered by Cabinet and Council at their meetings to be held on 10 February and 3 March 2022 respectively.

RESOLVED: That it be noted that: