Council predicts 2022/2023 budget will be £888,000 under the mark

At a meeting of the council’s Cabinet on Tuesday, April 18, it was revealed that as of the end of February, it is predicted that the authority will post an £888,000 underspend on its 2022/2023 budget.

This is an improvement on the forecast as it stood at the end of December when the council believed it would post a £2.4 million overspend on its revenue budget of £302 million.

This is due to money from specific reserve budgets being drawn upon, as well as grant funding from the UK and Welsh Government arriving towards the end of the financial year.

The report also shows that Adult Social Care have reported a £1 million improvement in their budget.

This is due to historic debts between the council and Powys Teaching Health Board being “settled” as well as care providers implementing the living wage costing £300,000 less than expected.

Finance portfolio holder Councillor David Thomas explained that drawing down of £2.5million from specific reserves would “support expenditure” as “planned” and would increase the overall underspend to £3.4 million.

Cllr Thomas said: “Services have continued to manage their expenditure by reducing costs and maximising the use of alternative funding sources that has improved the forecast.”

“A number of service areas including education, planning property and public protection have been able to use UK Shared Prosperity Funding this year.”

But of the £10.55 million cuts and savings that were needed in last year’s budget, £8.1 million had been delivered by February 28, with a further £190,000 expected by March 31.

This means that over £2 million in cuts and savings “remain unachieved.”

Cllr Thomas said that this will be “rolled forward” into this year’s budget.

Cllr Thomas said: “It is proposed that the remaining underspend achieved is set aside in a specific reserve to fund the expected shortfall in the budget to support the nationally agreed pay awards for 2023/2024.”

He added that it will the council cost £1.5 million for every percentage point above the five and five and a half percent salary increases the council has already planned for.

Head of finance, Jane Thomas said: “It’s pleasing to see the position that we’re now forecasting with a month to go from what it was early in the (financial) year.

“We are currently closing the accounts for the old financial year and will be able to report those to you shortly.

“The pay awards are the greatest risk to us.

“We will be keeping an eye on those negotiations and final determinations so that we know what cost that will incur for us in the next financial year.

Cabinet voted unanimous to note the budget position and grants received, to set up the budget reserve for pay and approve virements that move money between council accounts.