Agenda item

The Deputy Director of Finance submits a report to the Overview Select Committee which is the first in the monitoring cycle for 2022/23, providing early indications of the financial pressures the Council is facing this year.

The Committee will be recommended to consider the overall position presented within this report and make any observations it sees fit.

The Deputy Director of Finance submitted a report to the Overview Select Committee which was the first in the monitoring cycle for 2022/23 and which provided early indications of the financial pressures the Council was facing for the year.

The Committee was recommended to consider the overall position presented within the report and make any observations it saw fit.

The Head of Finance presented the report and the following points were noted:

·         The report highlighted a forecast of a £12.7million overspend for the year due to three main reasons: income shortfalls due to the on-going impact of the pandemic; inflation and energy costs which were much higher than anticipated including significant contracts such as the contract for waste collection and disposal; and the expected pay award which would; exceed the budget by £7.4million.

·         All councils were facing significant budget pressures, most of which would be ongoing to future financial years.

The Chair stated he felt that Finance officers were managing well both the present and future problems. The Head of Finance responded that the report showed current year problems, but inflation and the pay award meant there was now significant additional pressure on future years’ budget forecasts. She added that for the current financial year the pressures would be managed under the Managed Reserves Strategy but that this meant there would be less funding available to support future years.

The Chair requested, if possible, for future reports to show how plans were being affected by the additional budget pressures, and to include more progress on how issues were being managed. The Head of Finance reported that these points would be picked up in the draft 2023/24 budget which would be available towards the end of the calendar year.

Members were given the opportunity to ask questions and responses were given at the meeting, as follows:

·         The Housing Revenue Account had an overspend of £1.4m but was saving money on vacant posts of £1.2million. It was noted that voids did not generate rental income. It was asked that, if there was a shortage of people in the housing department that were able to refurbish properties to get them back out to rent, would it not be better to recruit to the vacant posts to speed up the process of getting the backlog of empty properties let. The Head of Finance would ask the Director of Housing to provide a written response to the Member.

·         It was reported that the Biffa waste management contract costs increased annually with inflation, and the expected impact was built into the budget each year. As inflation had turned out higher than predicted, contract costs now exceeded the current year’s budget. The Deputy Director of Finance added that various councils had different contracts with Biffa. It was noted that Biffa would also have seen their costs increase through inflationary pressures. He added that with regards to the recent increase in share price for Biffa, there had been movement in recent months from parties wanting to take over Biffa Group.

·         With regards to the increase in the running cost of swimming pools, officers were analysing total costs with the inflation rate rising, and that options for future funding would then be considered. It was acknowledged a wider area would be looked at, to include the festivals and events budget and the funding of lights etc. An energy report would be brought back to a future meeting of the Committee.

·         Members asked if they would be told of problems with local community centres, for example, having problems with meeting the costs of heating. It was reported that for any Council building their energy costs would be met. The forecast for next year was being looked at and would be built into the budget.

·         There were overspends in housing, including on homelessness, landlord services and district heating. It was acknowledged that the charges to tenants and leaseholders for district heating would need to increase. It was noted that households on the district scheme received heating and hot water, but electricity would come directly from their chosen commercial supplier. The Government were giving a £400 discount over six months to all households, which would be applied to a household’s electricity bill from October 2022.

·         The Government had recently announced support for businesses with their energy bills which would include schools. It was not known at this point if the support would be extended to the district heating scheme costs; this would likely depend on whether the supply tariff costs charged to the Council exceed the tariff support threshold.

·         People’s energy suppliers would receive the £400 assistance from Government, who would then pass on the reduction to residents. People should not have to do anything as it the reduction for each month would be applied automatically.

·         It was asked if the Council should review the plan to light up empty buildings at night in light of rising energy costs.

·         . Information on the additional waste contract and energy cost breakdown would be sent to the Members directly.

The Chair thanked officers for the report and noted the recommendation to consider the overall position presented, and the recommendations for Executive which were supported.

AGREED:

That:

1.    The overall position as outlined in the report be noted.

2.    The Director of Housing to be asked to provide information on the management of voids and that information regarding recruitment to vacant posts in Housing repairs should also be provided to Members.

3.    Information on the additional waste contract to be provided to Members.

4.    An energy costs report would be brought back to a future meeting of the Committee.