Agenda item

Report of the Director – Finance and Corporate Services

The Group were presented the Q1 Finance and Performance Report 2022/23, which outlines the Council’s position in terms of financial and performance monitoring.

The Service Manager - Finance informed the Group that for this financial year, the overall budget variance is expected to be an efficiency of £1.038m with proposals to utilise this for in-year pressures. The Group were advised that the budget has been set in anticipation of a rise in inflation and pay costs, adding that the Government are committed to employers paying the national living wage and the employers offer is to help meet this objective. It was noted that Cabinet at its meeting on 12 July 2022 approved additional allocations from 2021/22 underspends to mitigate the impact of the additional pressure.

It was noted that further risks remain in relation to cost pressures and it is therefore proposed to earmark £0.638m of the projected underspend to mitigate these risks. There have been unavoidable delays in the Bingham Leisure Hub and Crematorium giving way to delays in projected income streams.

The Service Manager – Finance highlighted the cost pressures associated with staff pay negotiations and inflation which is predicted to reach 15% later in the year, with significant risk cost to the Council and an impact on contracts that are index linked or due for renewal and on fuel and utilities. In addition, it was noted that this may have a knock-on effect on the collection rates for council Tax and Business Rates and on fees and charges as residents struggle with the increase in the cost of living.

The Communications and Customer Services Manager provided a summary of the progress of tasks and measures falling within each theme of the Corporate Strategy. It was reported that performance in the first quarter is very good, which was particularly evident in the following performance indicators:

·      LIDEG40 Percentage of RBC owned industrial units occupied – occupation levels have recovered following a number of units becoming vacant during 2021/22.

·       LIFCS21 Percentage of Non-domestic Rates collected in year – collection rates are 10% ahead of target.

·       LIFCS62 Percentage increase in self-serve transactions – there are a number of factors, in particular impact of the energy rebate scheme, increased bids for Choice Based Lettings and use of the bin calendar as a result of bank holiday changes.

·       LINS51 Number of leisure centre users – public – although not reaching pre-pandemic levels at present, usage is increasing and above target levels.

It was noted that one new task has been added for this year, ST1923_21 Delivery of Equality, Diversity and Inclusion scheme action plan.

Councillors asked specific questions in relation to the increasing energy and fuel costs and how much were officers able to predict these increases on the Council’s finances. The Service Manager - Finance explained that economic factors were more challenging creating a more stringent budget setting for this year. I addition, the Service Manager - Finance advised that increases are factored into the budget setting process including fees and charges for Council services. It was also noted that reserves could be called upon to prevent the need for external borrowing.

In terms of looking ahead the Group asked what tolerances are acceptable in terms of investment balances and underspends in the Capital Programme and prolonged negative variances. The Service Manager - Finance explained that the Corporate Strategy is set on a four-year cycle, that is reassessed annually at every budget setting point. In respect of negative variances, the Group noted that regular reviews of the Transformation Programme and good reserves places the Council in a good position.

Councillors highlighted the positive results in relation to the number of fly-tipping cases and dog fouling coming down and wished to see this reported positively through Council communications.

In respect of new grants, Councillors questioned whether officers from other areas of the Council could be called upon to provide some resilience during busy periods. It was noted that this had been the case during the height of the Covid pandemic.

It was RESOLVED that the Group note:

a)    The expected revenue budget efficiency for the year of £1.038m and proposals to earmark this for cost pressures;

b)    The capital budget efficiencies of £6.170m including the re-profiling of provisions totalling £1.465m to 2023/24 for Cotgrave Leisure Centre, Keyworth Leisure Centre, and West Park;

c)     The transfer of £0.15m from streetwise Loan Provision to Capital Contingency;

d)    The expected outturn position for Special Expenses to be in line with the Budget;

e)    The Council positively engaging in securing external funding with regards to the UK Shared Prosperity Fund, Levelling-up and Safer Streets; and

f)      Considers whether scrutiny is required for identified performance exceptions.