RESOLVED:

A. That Cabinet noted the financial reporting data for month 2, May 2022, relating to revenue budgetary control, showing a forecast net adverse variance at 31 May on net expenditure of £4,951m when corporate and funding items are included.

B. That Cabinet noted the contents of Section 5 and Appendix 5b of the report and approve the adjustments to the Capital Programme in the Table below:

C. That Cabinet ask CMT to investigate and report back on measures to reduce the adverse variance, recognising that CSF have set some actions out already in Section 4.

D. That approval be given to: i. the virement of £70,000 from the Unallocated Capital Maintenance Budget to the Melrose Capital Maintenance Budget ii. the increase of the Melrose Expansion Budget by £422,000, the funding of this additional expenditure will initially be met from the high needs grant. (As this funding is reworked through the whole SEN approved programme it will result in an additional drawdown of SCIL Funding in 2025-26) These adjustments will be detailed in the June 2022 Monitoring Report to September 2022 Cabinet

E: That cabinet recognises that the Period 2 outturn report assumes the use of a £2m inflation protection reserve to part cover the potential pay award and a further £1.412m from a PFI equalisation reserve to cover the excess inflation on the scheme. That Cabinet further note that the use of reserves to cover these costs is a one off solution and that permanent funding will be required within the MTFS. The potential use of these reserves will be kept under review during the financial year as the financial position is reported.

The Cabinet Member for Finance and Corporate Services presented the report and thanked officers for their work. It was noted that an adverse variance of £4.9 million was currently projected and that the cost of covid and the inflationary pressures continued to be a challenge for forecasting. Pressures on the Dedicated Schools Grant were being closely monitored. The Cabinet Member gave an overview of the departmental forecasts and outlined the recommendations.

The Director of Corporate Services spoke noting the position was expected to change as the report was early in the financial year with a further report due to Cabinet in September 2022.  

RESOLVED:

A. That Cabinet noted the financial reporting data for month 2, May 2022, relating to revenue budgetary control, showing a forecast net adverse variance at 31 May on net expenditure of £4,951m when corporate and funding items are included.

B. That Cabinet noted the contents of Section 5 and Appendix 5b of the report and approve the adjustments to the Capital Programme in the Table below:

C. That Cabinet ask CMT to investigate and report back on measures to reduce the adverse variance, recognising that CSF have set some actions out already in Section 4.

D. That approval be given to: i. the virement of £70,000 from the Unallocated Capital Maintenance Budget to the Melrose Capital Maintenance Budget ii. the increase of the Melrose Expansion Budget by £422,000, the funding of this additional expenditure will initially be met from the high needs grant. (As this funding is reworked through the whole SEN approved programme it will result in an additional drawdown of SCIL Funding in 2025-26) These adjustments will be detailed in the June 2022 Monitoring Report to September 2022 Cabinet

E: That cabinet recognises that the Period 2 outturn report assumes the use of a £2m inflation protection reserve to part cover the potential pay award and a further £1.412m from a PFI equalisation reserve to cover the excess inflation on the scheme. That Cabinet further note that the use of reserves to cover these costs is a one off solution and that permanent funding will be required within the MTFS. The potential use of these reserves will be kept under review during the financial year as the financial position is reported.