Agenda item

The Portfolio Holder for Corporate Governance, Finance and Resources to submit a report providing Members with information on the provisional year end for General Fund services and the subsequent implications on the Council’s balances and reserves.

Cabinet

(1)  NOTED the provisional year end position variations to the 2021-22 approved budget and the resultant effect on the Council’s balances and reserves for the General Fund and Special Expenses for both revenue and capital;

(2)  APPROVED the transfer of £116k in 2022-23 from the Corporate Priorities Reserve to the General Fund Working Balance to bring the level to £850k.

Dawn Garton, Director for Corporate Services introduced the report, the purpose of which was to provide Members with information on the provisional year end for General Fund services and the subsequent implications on the Council’s balances and reserves.

Mrs Garton advised that the report showed a comparison of the provisional outturn to the latest approved budget, originally set in February 2021.  There was a £94k underspend on General Expenses, due to the prudent decision to carry forward a Covid contingency of £162k from underspends in 2020-21.  A new £1m target for the working balance was agreed and Council approved that any underspend for 2021/22 be added to the working balance to achieve the new approved level.  It was recommended that during 2022/23 a further amount of £116k be moved from Corporate Priorities to the working balance, to result in a new balance of £850k, with consideration to the remaining amount required to reach the new target to be considered at budget setting for 2023-24.

Mrs Garton confirmed that the report showed the impact in the last financial year of the pandemic.  This resulted in a surplus of £50k, which contributed to the overall underspend of £94k.  This was the last specific Covid financial impact reporting, as this was now mainstreamed as part of the main budgets, which would be reflected in service costs etc.

Mrs Garton confirmed that Special Expenses Melton Mowbray had an overspend of £11k, which increased to £28k with approved carry forwards.  The impact of the provisional outturn on key reserves showed that the corporate priorities reserve had remained relatively stable.  The business rates equalisation reserve was at a healthy level and there could be scope to release some of the funds elsewhere from other areas of business.  However, business rates remained a difficult area to predict.  The collection fund had ended the year in a deficit position which would need to be addressed using the reserve.  The level on the reserve would be considered further at budget setting 2023-24. the council's own resources will be added back to the reserves appropriate.

The Portfolio Holder for Corporate Governance, Finance and Resources, Councillor Ronnie de Burle commented that the report provided a comprehensive overview of the Council’s year end position.  The year had ended with a small underspend and this was always welcome.  It must be noted that this was only possible because of the prudent decision taken this time last year with a general carry forward of £162k from the previous financial year’s Covid Contingency Reserve.  The Council’s position remained precarious and such prudent decisions were needed until the Council's finances were certain.  A boost to reserves by increasing the working balance would greatly assist in meeting unexpected challenges.  Certainty was needed to invest confidently in ongoing projects and activities.  An assessment of the inflationary pressures on the Council's finances was underway and this would feed into a high-level review of the Medium Term Financial Strategy.  However, restraint was needed until the outcome of the 2 year settlement was known.

Cabinet

(1)  NOTED the provisional year end position variations to the 2021-22 approved budget and the resultant effect on the Council’s balances and reserves for the General Fund and Special Expenses for both revenue and capital;

(2)  APPROVED the transfer of £116k in 2022-23 from the Corporate Priorities Reserve to the General Fund Working Balance to bring the level to £850k.

Reason for Recommendations:

It is important that Cabinet are aware of the financial position of the General Fund and Special Expenses to ensure they can make informed decisions that are affordable and financially sustainable for the Council.