5 Review of the Council’s Financial Position, including the impact of financial pressures in Children's Services PDF 237 KB
The Scrutiny Board has asked to receive a
report on a review of the Council’s financial position,
including the impact of financial pressures in Children’s
The report before the Scrutiny Board arose from a request the Scrutiny Board made to receive a report which provided a review of the Council’s financial position, including the impact of financial pressures in Children’s Services.
The Head of Financial Operations informed the Scrutiny Board that a report detailing the Council’s financial position had been scheduled for submission to the Full Cabinet meeting on 8th September 2022 detailing the Council’s financial position as at Period 4 (July). A further report would be submitted to a future meeting of Cabinet addressing Period 6.
Members attention was drawn to Section 3.2 of the report, which provided background for the next iteration of the MTFS from 2023/24 – 2025/26, specifically providing an early indication of the matters being dealt with .The report before the Scrutiny Board provided summaries of both the local and national challenges the Council faces; for example, the impact of the Covid-19 pandemic, cost of living impacts and energy supplier prices, all of which impact on the MTFS projections. Further pressures identified included growing demand placed on Children’s Services and adult social care reforms planned from 2023 and in future years. Members were advised that all Cabinet Portfolio areas were facing their own specific cost pressures.
Members were advised of a technical issue relating to the auditors’ sign-off of the Council’s Statement of Accounts for 2021/22. The technical issue affected all local authorities and meant that the statutory sign-off date for the accounts might not be achieved.
Members were informed that in terms of the revenue forecast outturn for 2022/23, there was an adverse variance on the Core Council of £2.619M in relation to the Children and Education portfolio and an in year adverse variance of £3.585M for the Dedicated Schools Grant (DSG).
The DSG deficit was a potential significant financial risk for the Council with effect from 2023/24 if the statutory override arrangements currently in place are not continued beyond the current year. The Council responded on 18th August 2022 to a Department for Education (DfE) consultation across all councils asking for the statutory override arrangements to be continued.
The Scrutiny Board was informed that some UKC re-phasing of Capital funding was likely, which would be reported in further detail to Full Cabinet in December 2022.
It was reported that 93% of projected savings were rated as green.
Having received the introduction to the report from the Head of Financial Operations, Members of the Scrutiny Board raised several questions related to the report, which in summary included the following matters:
Councillor Holt queried what solution was foreseen to the prospective ending of the statutory instrument in respect of the DSG. The Scrutiny Board was advised that it was hoped that the statutory override arrangements would be continued. If the statutory override arrangement did end, it would be very significant for all local authorities. For Solihull, the scenario of ending the statutory override arrangement would entail ring-fencing nearly £16.8M of reserves, which would have a serious impact on ... view the full minutes text for item 5