Medium Term Financial Strategy (MTFS) 2024/25 - 2028/29
Appendix 2 - Council's current financial position
Revenue outturn 2022/23
Council agreed the £254.3m revenue budget for 2022/23 on 24 February 2022. The overall provisional 2022/23 revenue outturn position results in an overall Council positive balance of £3.4m, after the application of agreed reserves funding to support financing of the budget and is the net addition to the Council's general fund reserves. Further information is available in the Provisional Revenue Outturn 2022/23 reported to Cabinet on 20 June 2023. The report included a review of strategic reserves and included a proposal to merge the two Earmarked Pandemic Reserves into the Budget Sustainability Reserve to support the budget over the MTFS period. The active management of reserves will enable the continuation of planned use of reserves to allow time to find significant permanent budget savings to achieve financial sustainability.
The positive year-end position is a testament to the collective approach taken by groups and services to keep pressures under review within the financial year and ensuring that action was taken in a timely manner to ensure outturn within budget. Effective financial management has ensured that all covid funding resources and time limited funds have been maximised alongside consideration of setting aside funding for future pressures and lost income.
Although the overall outturn is positive, the position includes several one-off transactions and masks overspends in some services. The positive outturn remains a significant achievement given the financial pressures faced by the services and enables the Council's sound financial position to be maintained within an extremely challenging economic and financial context. The Council has a strong and stable financial base with an outstanding record of budget delivery. Since the start of austerity, the council has made significant cuts and responded to demand pressures to deliver £190m of budget savings.
Revenue budget 2023/24
On 21 February 2023 the Council agreed a revenue budget of £289.903m which was balanced through planned use of £25.883m of reserves. This approach was in line with the agreed three-year approach for planned use of reserves to allow time to identify cuts and efficiencies.
Funding announcements made after the budget was set in February have resulted in increased funding available in relation to Better Care Fund (£0.416m) and Public Health Grant (£0.562m). To reflect this additional funding the expenditure budgets and financing have both been increased in the 2023/24 base budget. Within the current financial year, the expenditure base budget of £8.996m in relation to pandemic costs has been removed along with the use of budgeted funding in relation to the pandemic reserve (£8.996m) to reflect the approach to use Budget Sustainability to support the budget in the future. This results in a net reduction to the 2023/24 base budget of £8.018m to £281.885m.
Given high inflation and demand there is an expectation that delivery of the budget will be under significant pressure. Notwithstanding the positive outturn in 2022/23, the challenge that the Council faces should not be underestimated.