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Customer and Corporate Services Scrutiny Management Committee
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9 January 2023 |
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Report of the Chief Operating Officer Portfolio of the Executive Member for Finance and Major Projects |
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2022/23 Finance and Performance Monitor 2
Summary
1. To present details of the overall finance and performance position for the period covering 1 April 2022 to 30 September 2022, together with an overview of any emerging issues. This is the second report of the financial year and assesses performance against budgets, including progress in delivering the Council’s savings programme.
2. This report highlights a number of known pressures that need to be carefully managed throughout the year, with mitigation strategies being in place and regularly monitored across all directorates. Through ongoing monitoring and identification of mitigation alongside a review of reserves and other funding, the Council will continue to make every effort to reduce this forecast position but it is possible that it will not be reduced to the point that the outturn will be within the approved budget. The Council has £6.9m of general reserves that would need to be called on if this were the case.
3. We continue to see significant and ongoing pressure across both children’s and adults social care budgets in particular. Within Children’s these pressures are mainly in relation to Out of City placements and the continued use of agency staff. With Adults, the main pressures include the cost of care beds and also an inability to recruit to vacancies leading to the use of more expensive agency staff.
4. In a number of areas, services are holding vacancies in order to reduce costs and mitigate against the overall forecast overspend. This is expected to have an impact on the level of service that can be delivered in those areas. The impact of this is being closely monitored by Directorate Management Teams.
5. As outlined in the 2021/22 outturn report, considered by Executive in June 2022, many of the budget pressures are recurring whilst the mitigations that have allowed us to balance the budget were one off. Given the recent increases in interest rates, rising inflation and the ongoing pressures in both adults and children’s social care it is therefore unsurprising that the forecast is a significant overspend. Inflationary pressures are a particular challenge, adding some £4.5m to the overall forecast outturn. The 2022/23 pay award offer, whilst not yet confirmed, adds a further £2.5m to the expected pressures.
6. Whilst the council’s overall financial health provides a strong platform upon which to meet these financial challenges and good progress is being made with the achievement of savings, the forecast outlined in this report remains a matter of concern. The ongoing pressures within social care will again need to be addressed in the 2023/24 budget setting process.
Recommendations
7. The Committee is asked to:
· note the finance and performance information and the actions needed to manage the financial position
Reason: to ensure expenditure is kept within the approved budget.
Financial Summary
8. The gross financial pressures facing the council are projected at £7.7m but after mitigation it is considered that this can be brought down to a net position of £3.7m.
9. As previously reported, there are serious underlying budget pressures across both adult and children’s social care. Both adult and children’s social care is operating in an extremely challenging environment and as a result additional funding of £7.6m was allocated across the People directorate in the 2022/23 budget.
10. This report highlights a number of known pressures that need to be carefully managed throughout the year, with mitigation strategies being in place and regularly monitored across all directorates. Through ongoing monitoring and identification of mitigation alongside a review of reserves, the Council will continue to make every effort to reduce this forecast position but it is likely that it will not be reduced to the point that the outturn will be within the approved budget. The Council has £6.9m of general reserves that would need to be called on if this were the case.
11. A number of mitigations and cost control measures will need to be considered to ensure that there are additional expenditure controls in place to ensure a reduction in expenditure. Given the scale of the financial challenge, and the expected impact on budgets in future years due to inflationary and other pressures outlined above, it is vital that every effort is made to balance the overall position. It is recognised that this will require difficult decisions to be made in order to protect front line services to vulnerable residents.
12. York is maintaining both sound financial management, and delivering priority services to high standards, during a continued period of significant financial challenge. Whilst the Council’s track record of delivering savings and robust financial management provides a sound platform to continue to be able to deal with these and future challenges there remains a significant risk to ongoing service delivery and achievement of Council priorities that needs to be managed effectively.
Financial Analysis
13. The Council’s net budget is £135m. Following on from previous years, the challenge of delivering savings continues with £6.4m to be achieved in order to reach a balanced budget. The latest forecast indicates the Council is facing net financial pressures of £7.7m (after mitigation) and an overview of this forecast, on a directorate by directorate basis, is outlined in Table 1 below. The main variations and any mitigating actions that are proposed are summarised in Annex 1.
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Service area |
Net budget |
2022/23 Net Q1 Forecast Variation |
2022/23 Net Q2 Forecast Variation |
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£’000 |
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£’000 |
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Children & Education |
22,365 |
7,280 |
7,732 |
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Adult Social Care & Integration |
49,544 |
1,750 |
2,192 |
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Place |
21,748 |
747 |
0 |
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Customers & Communities, Public Health & Corporate Services |
24,655 |
693 |
693 |
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Central budgets |
18,072 |
-2,729 |
-2,829 |
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Sub Total |
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7,741 |
7,788 |
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Contingency |
-1,000 |
-1,000 |
-1,000 |
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Use of earmarked reserves |
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-3,000 |
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Net total including contingency |
135,384 |
6,741 |
3,788 |
Table 1: Finance overview
Directorate Financial Summaries
Corporate Services, including Customers & Communities and Public Health
14. Overall the remaining Council services are forecasting an overspend of £693k.
15. Internal Business Support is forecast to overspend by £240k due to reduced income from schools for payroll services and not achieving the budgeted vacancy factor. Other variations include the non-achievement of approved budget savings in ICT (£200k),a £62k shortfall in income projected in Registrars ) forecast impact of inflation on contracts for leisure facilities and libraries (£251k) and the continued pressure on Housing Benefit overpayments (£150k) as outlined in the 2021/22 outturn report. These overspends were offset by underspends in policy & partnerships (£67k) and finance & procurement (£62k) due to staff vacancies.
Corporate Budgets
16. These budgets include Treasury Management and other corporately held funds. A net underspend is forecast due to the early and increased delivery of a corporate saving. In addition, due to slippage on the capital programme, there has been a saving on interest and the cost of borrowing.
Reserves and Contingency
17. The February 2022 budget report to Full Council stated that the minimum level for the General Fund reserve should be £6.8m (equating to 5% of the net budget). At the beginning of 2022/23 the reserve stood at £6.9m and, as part of the budget report, approval was given to maintain this level of reserve in 2022/23 thus giving some headroom above the minimum level to take account of the continued risks facing the council, in particular the scale of future reductions on top of those already made.
18. Should the mitigation outlined in annex 1 not deliver the required level of savings in the current financial year then this reserve is available to support the year end position. However, in light of the ongoing financial challenges being faced by all councils it is now more important than ever to ensure the Council has sufficient reserves. Therefore, should it be the case that we need to draw down a substantial amount from this general reserve in 2022/23, some growth will need to be included in the 2023/24 budget to ensure that reserves can be maintained at an appropriate level.
19. In addition to the general reserve of £6.9m there are a range of other earmarked reserves where funds are held for a specific purpose. These reserves are always subject to an annual review and these funds will again be reviewed on a quarterly basis and where appropriate to do so will be released to support the in-year position. It is expected that some £3m is available to support the position. Whilst this is a prudent approach that will ensure the financial resilience of the Council, it is not a substitute for resolving the underlying overspends but instead allows time to develop future savings proposals in a planned way.
20. As in previous years a contingency budget is in place and this is currently assumed to be available to offset the pressures outlined in this report. The unused budget of £0.5m from last year, added to the base budget of £0.5m totals £1m available to offset the forecast overspend.
Loans
21. Further to a scrutiny review, it was agreed that these quarterly monitoring reports would include a review of any outstanding loans over £100k. There are 2 loans in this category. Both loans are for £1m and made to Yorwaste, a company part owned by the Council. The first was made in June 2012 with a further loan made in June 2017 as agreed by Executive in November 2016. Interest is charged on both loans at 4% plus base rate meaning currently interest of 6.25% is being charged. All repayments are up to date.
Performance – Service Delivery
22. In spite of the many challenges that the organisation and City has faced over the last two years, performance across the wider organisation, not just the Council plan indicators, has continued to remain high and continues to compare favourably when benchmarked against other areas with similar characteristics to York. Whilst Covid and the actions taken to tackle the global pandemic have in places affected performance in the short-term, the general pattern for data and information monitored by the Council is that levels of resident and customer satisfaction, timeliness and responsiveness, as well as various directorate and service based indicators, have remained positive.
23. It is likely that due to impacts of COVID, a number of the Council Plan indicators will continue to see a change both in terms of their numbers and their direction of travel in future reporting periods. The majority of the performance measures within the Council Plan have a lag between the data being available and the current reporting period and therefore impacts will not be immediately seen, and may occur over several years as new data becomes available.
24. The Executive for the Council Plan (2019-23) agreed a core set of strategic indicators to help monitor the council priorities and these provide the structure for performance updates in this report. The indicators have been grouped around the eight outcome areas included in the Council Plan. Some indicators are not measured on a quarterly basis and the DoT (Direction of Travel) is calculated on the latest three results whether they are annual or quarterly.
25. Performance items around the Council plan topic “Open and Effective Council” are reported below, as historically other topics in the Council plan are reported to the other various scrutiny setups. See background documents for links to where this data has also been published at Executive.
Average Sickness Days per FTE - CYC (Excluding Schools)
26. At the end of August 2022, the average number of sickness days per FTE (rolling 12 months) had increased to 13 days from 9.1 in August 2021. In 2020-21, sickness had reduced in the authority by approximately 2 days per FTE, to 8.8 days per FTE, which is close to the LGA public sector for Yorkshire and Humber authorities average of 8 days. Since the start of Covid, although exact comparative figures are not yet available, all authorities in Yorkshire and Humber are reporting a significant increase in sickness levels within the whole workforce due to both Covid cases and increased pressures in frontline services.
27. On top of day-to-day managerial practices for sickness cases, additional work is underway to assist and remind managers of the support and services that employees can access as well as the managerial role in ensuring the wellbeing and absence management of those employees absent, or those who remain at work but showing signs of reduced resilience. Managers are being reminded of the importance of timely absence support for individuals and teams, and employees are reminded of the self care that they need to exercise to ensure that they are able to perform their roles effectively.
28. CYC still has a number of Covid cases throughout staffing structure and although now falling will contribute to increases overall sickness figure. Internally, business continuity plans are in place to ensure that services are able to be resilient to the fluctuating peaks and troughs of Covid infections, and it is likely that absence levels associated with Covid will return in the late Autumn / Winter, when combined with other reason for absence, which will further impact on our absence levels.
Customer Services Waiting Times (Phone / Footfall / Webchat etc)
29. Customer Service is the main point of contact for residents and business visitors. Demand was higher than usual during Q2 due to new demand such as; supporting customer enquiries/applications for the £150 energy rebate scheme and the household support fund and higher than usual seasonal demand following a new approach to the annual electoral canvass. The number of calls received increased to 59,338 (56,253 in Q1 2022-23), with 70% answered (44,158). 27.1% of calls were answered within 20 seconds.
30. The data for footfall to West Offices is still to be confirmed due to changes in systems. In addition to speaking to customers over the phone, the customer service team also responded to 13,981 e-mails (13,380 in the previous quarter). Customer satisfaction is 63%, with high wait times cited as the main reason for dis-satisfaction responses. This should improve as wait times reduce.
31. Customers are continuing to opt to access services using alternative means:
· 8,798 customers made payments using the auto payments facility
· 14,897 people used the auto operator
· 54% of issues available to report online were reported by customers on-line
· There were around 900 thousand pages of the CYC website reviewed
Number of days to process Benefit claims (currently Housing Benefit)
32. The average number of days taken to process a new Housing Benefit claim, or a change in circumstance, has remained stable, being just over three days during 2021-22. York performance is above the most recent national average of 4.98 days (2020-21).
33. The first quarter of 2022-23 saw the introduction of the Energy Rebate (£150), the second Houshold Support Fund (HSF) and payment to qualifying businesses of the Covid Additional Relief Fund (CARF). This support ran through to the end of the second quarter (30th Sep). The YFAS fund aimed at keeping residents in the community, and providing emergency payments, continues to operate as normal. A new HSF scheme will start on the 1st October through to the end of March 2023.
34. Business and Welfare support provided at the end of the second quarter of 2022-23 includes:
· Household Support Fund – 8,332 payments to families totalling £1,006,782
· 60,516 Energy Rebate payments of £150 and 13,863 credits of £150 to Council Tax accounts which accounts for 100% of qualifying residents
· 76 Discretionary Energy Rebate payments of £150 totalling £11,400 (this scheme runs until the end of November)
· CARF payments to 1,000 businesses totalling £4.5m
· 626 YFAS payments totalling £143k
· 98 Discretionary Housing Payments totalling £87k
% of 4C’s Complaints responded to ‘In Time’ / % of Grade 1 4C’s Complaints responded to ‘In Time’
CYC Apprenticeships
37. Regular updates on apprenticeships within CYC and York are submitted to the Decision Sessions for Economy and Strategic Planning and the Staffing Matters and Urgency Committee. The most recent publication can be found here: https://democracy.york.gov.uk/documents/s161342/SMUC%20Apprentices.pdf
FOI/EIR and SAR - % In time
38. In Q2 2022-23, although there has been a decrease in the number of FOIs (Freedom of Information Act requests) and EIRs (Environmental Information Regulation requests) received compared to the same reporting period in 2021-22 (159 FOIs in Q2 2022-23 compared to 263 in Q2 2021-22 and 148 EIRs in Q2 2022-23 compared to 156 in Q2 2021-22), we have improved the percentage of both FOIs and EIRs responded to in time (82.9% of FOIs in Q2 2022-23 compared to 76.7% in Q2 2021-22 and 93.0% of EIRs in Q2 2022-23 compared to 80.1% in Q2 2021-22).
39. There has been an increase in the number of SARs (subject access to records request) received compared to the same reporting period in 2021-22 (29 in Q2 2022-23 compared to 24 in Q2 2021-22), and we continue to improve the percentage of SARs responded to in time (69.2% in Q2 2022-23 compared to 65.2% in Q2 2021-22).
Annexes
40. All performance data (and approximately 1,000 further datasets) within this document is made available in machine-readable format through the Council’s open data platform at www.yorkopendata.org under the “performance scorecards” section.
Consultation
41. Not applicable.
Options
42. Not applicable.
Council Plan
43. The information and issues included in this report demonstrate progress on achieving the priorities set out in the Council Plan.
Implications
44. The implications are:
· Financial are contained throughout the main body of the report.
· Human Resources (HR) There are no HR implications related to the recommendations
· One Planet Council / Equalities Whilst there are no specific implications within this report, services undertaken by the council make due consideration of these implications as a matter of course.
· Legal There are no legal implications related to the recommendations
· Crime and Disorder There are no crime and disorder implications related to the recommendations
· Information Technology (IT) There are no IT implications related to the recommendations
· Property There are no property implications related to the recommendations
· Other There are no other implications related to the recommendations
Risk Management
45. An assessment of risks is completed as part of the annual budget setting exercise. These risks are managed effectively through regular reporting and corrective action being taken where necessary and appropriate.
Contact Details
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Authors: |
Chief Officer Responsible for the report: |
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Debbie MitchellChief Finance OfficerExt 4161
Ian Cunningham Head of Business Intelligence Ext 5749 |
Ian FloydChief Operating Officer
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Report Approved |
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Date |
25/11/22 |
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Wards Affected: All |
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For further information please contact the authors of the report |
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Glossary of Abbreviations used in the report:
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CARF |
COVID-19 Additional Relief Fund |
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CYC |
City of York Council |
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EIR |
Environmental Information Regulation requests |
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FOI |
Freedom of Information Act requests |
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FTE |
Full Time Equivalent |
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HSF |
Household Support Fund |
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ICT |
Information and Communications Technology |
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LGA |
Local Government Association |
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SAR |
Subject Access to Records request |
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YFAS |
York Financial Assistance Scheme |