To consider the report of the Cabinet Member for Performance and Resources presenting the Council’s final General Fund Revenue and Capital Outturn positions against agreed budgets for the 2022-23 financial year, and report on performance against certain key financial performance indicators.
21.1 The Cabinet Member for Performance and Resources, Councillor Hannah Norman, introduced and summarised the report. She advised the Committee that the year-end position for the financial year 2022-23 was currently a decrease to the General Fund balance of £278k against a budgeted net zero position, and that the level of earmarked reserves had decreased by £3.209m to £4.264m.
21.2 Councillor Norman stated that 2022-23 had been a challenging year, with service areas still experiencing the impact of Covid-19 pandemic, the cyber incident of 2021 and rising inflation. She noted that there had been an additional pressure of £360k as a result of the Council providing increased support to Aspire Leisure Trust to assist with additional energy cost pressures during the year. Councillor Norman confirmed that parking levels had continued to increase and were now at normal pre-Covid levels, however inflationary pressures alongside a slow return to normal parking levels had led to an adverse position of £260k. She noted that the Council’s IT had proved close to budget, despite significant spending needed to restore services following the cyber incident and that although the Commercial Property portfolio was averse to budget by £0.8m, it had contributed a net income of £2.57m.
21.3 In relation to other portfolio areas, Councillor Norman confirmed that the outturn position for the Communities and Neighbourhoods was a minor underspend due to the performance of Shopmobility and community grants. Referring to the Culture and Leisure portfolio, she confirmed that the planning of works at the Museum of Gloucester to utilise the MEND grant funding in 2023-24 was underway.
21.4 Referring to paragraph 2.2(1)v in the report, Councillor Wilson asked how long it was likely to take for the volume of data to be fully analysed and reconciled. The Head of Finance and Resources confirmed that the process of re-hydrating the financial systems for 2021-22 was complete, and that the Finance Team were in the process of producing the 2021-2022 end of year accounts. He explained that once this was complete, the Finance Team would be able to work on the 2022-23 financial year. The Head of Finance and Resources noted that following this, there might be some adjustments but neither he nor the team expected material differences.
21.5 Councillor Wilson referred to the challenges caused by high inflation and the pandemic and noted his understanding that the Council had used the VAT shelter to hedge against the interest rate rises. He asked whether the rates had risen more than expected, to which the Head of Finance replied that they had. He confirmed that the Council had taken out short term borrowing to cover year 1, with rates expected to return to more normal levels over the next few years.
21.6 In response to an additional query from Councillor Wilson, the Head of Finance and Resources confirmed that the Council was still working within the expected parameters. Councillor Norman noted that the latest developments on interest rates were discussed on a regular basis at Major Projects Board and Cabinet Briefing meetings, and that she was confident in the advice being given.
21.7 In response to an additional query from Councillor Wilson regarding the outturn on Waste and Recycling, Councillor Norman confirmed that the Council’s previous arrangement with Urbaser was on a fixed-rate basis, however its current arrangement with Ubico was a ‘Cost Plus’ model. She explained that this meant that if there was a cost increase, there would also be a cost to the Council, and encouraged ward Members to be mindful of these additional costs.
21.8 The Chair asked for clarification as to what the £305k in the Museum Bequest reserves was likely to be used for. It was clarified later in the meeting by the Head of Finance that the Museum Bequest reserves were intended to be used to support the Museum of Gloucester’s development.
21.9 In response to an additional query from the Chair regarding the Lottery reserve, Councillor Norman explained that this reserve was utilised when lottery players had not allocated to a certain charity, as this money was put into a centralised reserve for the Communities Team to allocate to various charitable organisations.
21.10 Councillor Hyman referred to the narrative concerning prompt payment performance at 8.1 in the report and asked whether the Council was now up to date with payments. The Head of Finance confirmed that the Council had paid all suppliers promptly, however the cyber incident had caused a delay in producing the data.
21.11 In response to a question from Councillor Wilson regarding car parking revenue, Councillor Norman referred to the recommendation made by the Overview and Scrutiny Committee which had been accepted by Cabinet to include additional narrative in quarterly Financial Monitoring Reports on car parking usage and income performance. She confirmed that updated figures on car parking usage would be provided in the Quarter 1 Financial Monitoring Report.
RESOLVED – That the Overview and Scrutiny Committee NOTE the report.