Issue - meetings

Division/Wards Affected: All

Purpose: To provide Cabinet with an early update of the progress of the Councils revenue budget for the 2023/24 financial year.

Author: Jonathan Davies, Head of Finance (Deputy S151 officer)

Contact Details: jonathandavies2@monmouthshire.gov.uk

That Cabinet notes the early signalling of pressure against the Council’s revenue budget of £2.6m following a review of material pressures and savings and the potential mitigations that can be applied.

That Cabinet notes the ongoing financial risks continuing to manifest in the current difficult operating environment where:

-       inflation is continuing to remain resolutely high with a consequential impact of rising interest rates;

-       the ongoing cost of living crisis and further impact that rising interest rates will have housing costs;

-       the likelihood for the UK economy to enter recession;

-       a shortage of staff linked to the ongoing tight labour market;

-       continuing supply chain issues that require more costly alternative or expedited arrangements;

-       the impact the above is having on the increasing demand for supportive Council services and reducing demand for income generating services.

That in considering the above, and as part of the mitigations outlined in 2.1 of the report, that Cabinet approves the budgeted use of £2.5m of useable revenue reserves to increase the Council’s overall level of inflation contingency budget for 2023/24 to a total of £3m. The use of a further £2.5m equates to the amount of reserves that were originally anticipated to be required to support the 2022/23 budget outturn position, but were not ultimately called upon.

That in light of the severity of the current financial position and the continuing financial headwinds as outlined in this report, that Cabinet requires the Strategic Leadership Team to engage in immediate mitigating action to bear down on avoidable cost and identify all potential further income opportunities.

That Cabinet requires officers to develop the structured approach to tackling the budgetary pressures presenting, leading up to a more detailed Month 4 financial forecast being brought forward in September 2023.