Agenda item

Agenda item

Revenue Budget Monitoring

Report of the Deputy Chief Executive and City Treasurer attached


The Executive considered a report of the Deputy Chief Executive and City Treasurer, which outlined the projected outturn position for 2022/23, based on the latest expenditure and income activity and future projections.


The Executive Member for Finance and Resources advised that the report identified a forecast overspend of £7.6m for 2022/23, based on activity to date and projected trends in income and expenditure, and included the ongoing financial implications of COVID-19, government funding confirmed to date and the impact of inflation and the agreed pay award on the financial position. 


The above was a substantial change from the position reported to Executive in September 2022, resulting in an improvement of £12.5m since the last report to Executive.


The previous forecast included the provisional impact of the higher pay offer for local government and was during an extremely volatile period for energy prices, predating the additional government support announced for the public sector.  Since then the actual impact of the pay award has been costed, taking into account the current level of vacancies reducing the cost by £2.2m to £7.3m.  The decision to reverse the employer 1% national insurance increase had also resulted in savings of £0.6m.  Energy prices had settled at a lower level along with some government compensation together (saving £3m) and price inflation had been mitigated where possible, reducing the budget requirement by £2.7m to £5.4m. These amounted to a £8.5m reduction in the inflation overspend. This was coupled with some improvements in the departmental position, many of which are one off and only impact the 2022/23 financial year. 


It was positive that the main demand led services of Adults, Children’s and Homelessness were underspending or breakeven, which put the Council in a better position than many other councils and reflected the investment in prevention strategies over the last few years. 


Whilst the report focused on 2022/23, the implications of COVID-19 and record levels of inflation on the Council’s cost base would have a significant impact on the Council’s finances for a number of years. With the scale of funding pressures and future resource constraints, it was  therefore vital that the Council continued with its programme of innovation and reform and developed its operating model to help tackle these challenges and keep the Council’s finances stable and sustainable. A programme of savings totalling £42m had been developed and reported to scrutiny committees in November 2022. 


Officers continued to work to reduce the overspend through identifying in year efficiencies and working with suppliers to reduce and mitigate inflation requirements and progress would be reported back to Executive in February 2023.


Councillor Leech welcomed the work of Officers in reducing inflationary pressures on the Council’s Revenue Budget and sought clarification of similar work was being undertaken to reduce inflationary pressures associated to the Council’s Capital Programme.  He also sought confirmation as to whether the Council would receive a rebate in relation to the additional profit made by the Greater Manchester Waste Disposal Authority (GMWDA) through the incineration of waste.  The Deputy Chief Executive and City Treasurer gave assurances that the Officers were working on reducing the inflationary pressures associated to the Council’s Capital Programme and that there would likely be an expected financial return from the GMWDA but discussions were still ongoing at the moment so no further detail could be provided.




The Executive:-


(1)      Note the global revenue monitoring report and forecast outturn position which is showing a £7.6m overspend.


(2)      Approve the release of reserve funding to support residents through the Cost of Living as detailed in paragraph 2.18 of the report.


(3)      Approve the use of unbudgeted external grant funding as detailed in paragraph 3.2 of the report.


(4)      Approve the request for contingency funding as detailed in paragraph para 3.3 of the report.


(5)      Approve the allocation of budgets to fund the pay award as detailed in paragraph 3.4, electricity increases reported in paragraph 3.5 and price inflation outlined in paragraph 3.6 of the report.

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