Agenda item

It was moved by Councillor Anderson,

Seconded by Councillor Swindlehurst,

“On the basis of the risks and issues raised in paragraphs 2.1 and 2.2 and the rest of the report, in the opinion of the Director of Finance, Council approved the budget on the basis that:

a)  the proposed level of Council reserves are adequate to support the budget for 2022/23 having regard to an assessment of current financial and other risks set out extensively in this report and assuming these risks do not increase beyond those that can be contained by the Council.  It should also be noted that matters will continue to be identified and will change throughout the coming financial year and beyond

b)  the estimates are robust for the calculation of the budget within the confines of the many risks noted throughout this report.  Particular attention is drawn to the following specific conditions and risks:

(i)  the recommended level of general balances, for 2022/23 is £20m, although this is the bare minimum as a percentage of Net Revenue Expenditure, and places the Council in the lowest quartile in comparison to similar authorities

(ii)  the budget which has levels of contingency and conditions built in to reflect the considerable risks the Council is facing and is predicated on continuing support from DLUHC ;

(iii)  agreement of the Capitalisation Directive for 2022/23 and future years as proposed to DLUHC in February 2022 at estimated figures of £223m to 31/3/22 and £84m for 2022/23

(iv)  agreement by DLUHC that they will agree to capitalisation directions or other support to equal the actual figures for the outstanding, current and forthcoming years as the accounts for the years are closed

(v)  agreement by DLUHC that they will agree to capitalisation directions or other support to equal the estimated figures for future years as the budgets are prepared for these future years

(vi)  agreement by DLUHC that they will agree to capitalisation directions or other support or agreed mechanisms to supplement the level of revenue budget savings that the Council can achieve as discussed and as will be reviewed.  Further that they will agree to finance/support on a recurrent basis any recurrent gap that would arise if the £20m annual level of savings was not achieved in a sustainable manner

(vii)  the current level of Council general reserves outside of the support from DLUHC relating to specific risks and specific initiatives is currently nil.  These reserves will be established and built up over time once a more stable finance base has been created.

(viii)  as at the end of December 2021, the Council has a small amount of earmarked reserves of £14m. The majority of these funds were accumulated during 2020/21 and 2021/22 as part of the Government’s covid response measures to be used for specific purposes such as helping local business and managing the outbreak of covid and cannot be used for general purposes

(ix)  as the Council has no complete and fully accurate accounts since 2015/16 and will not have these complete up to 31/3/22 until well into the financial year 2022/23 the financial position is subject to considerable potential change which may impact on the robustness of the budget

(x)  the Council embeds the good practise now being designed but notes that this will take time to fully develop and thus as with the accounts the various estimates will be subject to change

(xi)  the Council has a major dependency on asset sales which will significantly impact on the budget for 2022/23 and beyond and which will thus again affect the level of robustness of the budget”

The recommendations were put to the vote and carried with 27 votes for and 6 abstentions.

Resolved – On the basis of the risks and issues raised in paragraphs 2.1 and 2.2 and the rest of the report, in the opinion of the Director of Finance, Council approved the budget on the basis that:

a)  the proposed level of Council reserves are adequate to support the budget for 2022/23 having regard to an assessment of current financial and other risks set out extensively in this report and assuming these risks do not increase beyond those that can be contained by the Council.  It should also be noted that matters will continue to be identified and will change throughout the coming financial year and beyond

b)  the estimates are robust for the calculation of the budget within the confines of the many risks noted throughout this report.  Particular attention is drawn to the following specific conditions and risks:

(i)  the recommended level of general balances, for 2022/23 is £20m, although this is the bare minimum as a percentage of Net Revenue Expenditure, and places the Council in the lowest quartile in comparison to similar authorities

(ii)  the budget which has levels of contingency and conditions built in to reflect the considerable risks the Council is facing and is predicated on continuing support from DLUHC ;

(iii)  agreement of the Capitalisation Directive for 2022/23 and future years as proposed to DLUHC in February 2022 at estimated figures of £223m to 31/3/22 and £84m for 2022/23

(iv)  agreement by DLUHC that they will agree to capitalisation directions or other support to equal the actual figures for the outstanding, current and forthcoming years as the accounts for the years are closed

(v)  agreement by DLUHC that they will agree to capitalisation directions or other support to equal the estimated figures for future years as the budgets are prepared for these future years

(vi)  agreement by DLUHC that they will agree to capitalisation directions or other support or agreed mechanisms to supplement the level of revenue budget savings that the Council can achieve as discussed and as will be reviewed.  Further that they will agree to finance/support on a recurrent basis any recurrent gap that would arise if the £20m annual level of savings was not achieved in a sustainable manner

(vii)  the current level of Council general reserves outside of the support from DLUHC relating to specific risks and specific initiatives is currently nil.  These reserves will be established and built up over time once a more stable finance base has been created.

(viii)  as at the end of December 2021, the Council has a small amount of earmarked reserves of £14m. The majority of these funds were accumulated during 2020/21 and 2021/22 as part of the Government’s covid response measures to be used for specific purposes such as helping local business and managing the outbreak of covid and cannot be used for general purposes

(ix)  as the Council has no complete and fully accurate accounts since 2015/16 and will not have these complete up to 31/3/22 until well into the financial year 2022/23 the financial position is subject to considerable potential change which may impact on the robustness of the budget

(x)  the Council embeds the good practise now being designed but notes that this will take time to fully develop and thus as with the accounts the various estimates will be subject to change

(xi)  the Council has a major dependency on asset sales which will significantly impact on the budget for 2022/23 and beyond and which will thus again affect the level of robustness of the budget