Agenda item

To consider the report of the Chief Officer (Financial Services) providing an update on the financial health of the Authority including the provisional outturn position in respect of both the General Fund revenue budget and the Housing Revenue Account as at month 11 of the 2022/23 financial year.

The Chief Officer (Financial Services) submitted a report presenting the financial health and provisional outturn of the Authority in respect of both the General Fund revenue budget and the Housing Revenue Account as at Month 11 of the 2022/23 financial year.

In presenting the report, the Executive Member for Resources provided an overview of the key information within it, which included reference to the fact that an overspend of £16.3m was projected for the Authority’s General Fund services, as at month 11 of 2022/23. The ongoing significant financial challenges being faced were highlighted, and that should there be any adverse variation to a balanced budget position at the 2022/23 year-end, then this would require the use of the Strategic Contingency Reserve balance.

Responding to several enquiries, the Board was advised that the balance of the Merrion House capital reserve is £23.4m, with the proposal being for that to be applied to Minimum Revenue Provision (MRP) resulting in a reduction in the general fund budget required to fund MRP, the saving from this allocation will enable a contribution of the same amount then being made towards the Strategic Contingency Reserve. Members also received information regarding the balance which would remain in the Strategic Contingency Reserve following the payment of the currently projected 2022/23 overspend, with the Board also receiving information on the current position regarding any potential variation to the Council’s projected overspend between months 11 and 12, together with the plans in place to respond to any such potential variation.

Following comments raised, the Board received further information on the range of actions being taken to mitigate the financial challenges which continued to be faced within the Children and Families directorate, including the actions of the cross-directorate Delivery Board. The Board also received details of the ways in which Elected Members were updated and engaged in the actions being taken in this area.

In discussing the financial challenges being faced in Children and Families, it was acknowledged that a key factor was the increased demand across a number of the directorate’s services which continued to be experienced. It was noted that the situation in Leeds reflected the national trend. As part of this discussion, further detail was provided on the representations being made at a national level in response to such matters. It was also emphasised that the Council was committed to ensuring that children and young people would continue to receive the appropriate support that they required. 

Members discussed the provision of care services within Children and Families directorate and received further information on the actions being taken to maximise the level of services being provided in-house and within Leeds, where appropriate and where possible. Also, further detail was provided on the collaborative approach which was being taken across Local Authorities in this area. Finally, the Board was updated on the work being undertaken locally and nationally around addressing the challenges faced in relation to the recruitment and retention of staff in a number of service areas across the Council, including services within Children and Families.

RESOLVED –

(a)  That it be noted that at Month 11 of the 2022/23 financial year (February), the Authority’s General Fund services are forecasting an overspend of £16.3m and that the Housing Revenue Account is forecasting a balanced position;

(b)  That it be noted, that where an overspend is projected, directorates, including the Housing Revenue Account, are required to present action plans to mitigate their reported pressures, in line with the Revenue Principles agreed by Executive Board in 2019; with it also being noted that savings actions identified to date are included in the reported overspend position and actions will continue to be identified which will contribute towards improving this projected financial outturn position;

(c)  That it be noted that known increased inflation and known impacts of the rising cost of living, including the agreed 2022/23 pay award, have been incorporated into this reported financial position, with it also being noted that these pressures will continue to be assessed, with the final position being incorporated into Final Outturn position for 2022/23 to be received by Executive Board in June 2023;

(d)  That it be noted that the report entitled, ‘Financial Performance – Outturn Financial Year Ended 31st March 2023’, which will be received at this Board in June 2023 will recommend that the final overspend at Outturn is balanced through the use of the Strategic Contingency Reserve;

(e)  That the application of the remaining balance of the Merrion House capital receipt to redeem debt in 2022/23, to reduce MRP by the same amount and to contribute the resulting revenue saving to an earmarked revenue reserve, be approved.