To receive a report of the Deputy Chief Executive (S151) presenting a financial update in respect of the income and expenditure so far in the year.
The Council had before it a report * from the Deputy Chief Executive presenting a financial update in respect of the income and expenditure so far in the year.
The Cabinet Member for Finance outlined the contents of the report with reference to the following:
· This set the scene for the Council’s annual financial forecasting based on the first quarter of 2022/23. In summary it showed a projected General Fund overspend of £258k and Housing Rev Account underspend of £217k. Clearly the cost-of-living situation, notably the headline CPI rate of 9.4%, was now having a material impact on the Council’s performance, especially with regard to fuel and utility expenditure. As secondary effect of falling collection rates for both Council Tax and Business Rates was occurring as financial pressures grow on residents and businesses.
· Performance was also being impacted by staffing recruitment and retention issues, further exacerbated by the current ongoing pay negotiations. On this point, this report included an average salary increase from a budgeted 2% to possible 3% whilst the unions were considering an initial £1,925 fixed sum pay offer which would be an average slightly higher percentage. Overall, given all the inflationary pressures in play, the Council had done well to achieve the projected outturns.
· Officers would continue to monitor all of the prevailing budget issues with regular updates provided. These would inform the MTFP and presented to a Cabinet meeting in October, and were also being reflected in early calculations for the 2023/24 Budget.
· Agenda Item 13 – 3RDL Annual Report
This is the Annual Report for 3RDL up to the end of Mar 22. The year saw the completion of the Halberton project at a profit, continuation of the St George’s Court project where overall performance had remained on track, and the start of the Bampton project. As with any business, 3RDL had faced a number of risks and issues over the year but the most significant change was revised Treasury rules placing limits on where the business may operate. There had also been delays in some important projects being ready to start for reasons beyond the business’s control. These hampered progress in the year and the impacts continued to be felt.
· The annual report provided an opportunity to consider whether the business remained a sound investment for the Council. Of itself, whilst still making a loss in 21/22, Council returns are steady and the business stable. Risks and issues were not unusual but importantly prospects remain positive for profitable projects, particularly given the buoyant state of the housing market. However, development companies must be innovative and agile in a competitive market and in the face of labour and cost pressures. The Council looks forward to the revised Business Plan which is in preparation to be considered by the Cabinet and then consolidated into the Council’s 2023/24 draft budget position where this outlook will be further examined.
A brief discussion took place regarding the completion date for the St Georges Court development. It was stated that construction work should be complete by the end of the year. Construction at the Bampton site was progressing well but there had been labour issues, however, it was hoped this would be complete by the end of the financial year.
a) Note the financial monitoring information for the income and expenditure for the three months to 30 June 2022 and the projected outturn position.
b) Approve the Deliverable Capital Budget for 2022/23, including the request to bring forward £2,925k of expenditure relating to Salix funded decarbonisation schemes and £56k of S106 expenditure from later years, noting the remainder of the Overall Capital Programme is planned to be spent in 2023/24 to 2026/27.
c) Note the use of Waivers for the Procurement of goods and services as included in Section 10;
(Proposed by Cllr A Moore and seconded by Cllr D J Knowles)
Reason for the decision - Regular financial monitoring information mitigates the risk of unforeseen over or underspends at year end and allows the Council to direct its resources to key corporate priorities.
Note: * Report previously circulated, copy attached to the minutes.