Agenda item

Consider report by the Acting Chief Financial Officer. (Copy attached.)

            There had been circulated copies of a report by the Acting Chief Financial Officer which provided budgetary control statements for the Council’s General Fund based on actual expenditure and income to 30 June 2022 along with explanations of the major variances identified between projected outturn expenditure/income and the current approved budget.  The Council had started the new 2022/23 financial year with a number of pressures emerging regarding the current operating environment.  Those included continuing impacts from the COVID-19 recovery period and unprecedented inflation levels in the wider economy causing both internal Council pressures and also pressures on critical service delivery partners.  It was therefore proposed that the COVID-19 reserve, previously held to provide one-off funding to support the impacts of COVID-19, was redirected to a ‘Recovery Fund’. The Recovery Fund would support the Council, and where appropriate its partners, through deployment of one-off funding to support the current operating environment including impacts of COVID-19 recovery, inflation pressures and wider operating constraints including staffing challenges.  Due to the very challenging operating environment it remained essential that the Council continued to operate as efficiently as possible to ensure that any financial implications not yet clear could be managed as the financial year progressed.  Forecasts had been completed at the first quarter of 2022/23 at the 30th June which projected the Council to be in a balanced position at the financial year end.  The forecast position included the deployment of £4.249m of the Recovery Fund in order to balance the 2022/23 budget which resulted in a balance of £5.807m remaining to address future pressures.  The Recovery Fund would be drawn down as required to meet identified financial pressures.  Confirmed funding was in place for 2022/23 and was categorised as follows: funding provided by Scottish Government £0.156m, funding carried forward from 2021/22 through COVID-19 reserve £9.465m, funding included in the 2022/23 Financial Plan for COVID-19 response £0.069, and Assumed Local Mobilisation Plan (LMP) funding £0.366m.  Total COVID-19 funding was £10.056m.  COVID-19 funding was split between funding which had been ring-fenced to be used for a specific purpose (£1.974m), for example education recovery, LMP and admin funding, and that which could be used more generally by the Council to address COVID-19 pressures (£8.082m). This included all residual COVID-19 funding carried forward from 2021/22 and full details of funding available were shown in Appendix 2 to the report. Financial plan savings of £12.027m were required to be delivered in 2022/23. An analysis of deliverability was shown in Appendix 3 of the report.  Following the June month end £6.965m (58%) savings had been delivered permanently, £3.509m (29%) were profiled to be delivered by 31 March 2023 and £1.553m (13%) had been delivered on a temporary basis through alternative savings.  Members praised the report and highlighted the encouraging level of permeant savings that had been made.  With reference to recommendation (e), Councillor Rowley moved to amend the wording, replacing “note” with “welcome”, which was unanimously accepted.  

            DECISION

            AGREED to:-

(a)        note the projected corporate monitoring position reported at 30 June 2022, the remaining pressures identified, the underlying cost drivers of this position and the identified areas of financial risk as reflected in Appendix 1 to the report;

(b)       approve the current COVID-19 reserve, previously held to provide one-off funding to support the impacts of COVID-19, be redirected to a ‘Recovery Fund’ to support the current operating environment including impacts of COVID-19 recovery, inflation pressures and wider operating constraints;

(c)        note the pressures of £4.249m detailed in Appendix 1 to the report being funded from the Recovery Fund in 2022/23 in order to balance the budget;

(d)       note the Recovery Fund resources detailed in Appendix 2 to the report;

(e)        welcome the progress made in achieving the Financial Plan savings in Appendix 3 to the report; and

(f)        approve the virements attached as Appendices 4 and 5 to the report.