The purpose of the report was to set out the forecast revenue and capital budget positions as at quarter 1 for 2023/24 and to give an overall financial update for the Council.

The commentary of the report does not attempt to cover all budgetary changes but draws attention to the key factors affecting net expenditure differences.

The General Fund is forecasting a deficit of £554k, this is where there is more expenditure than income. The utilisation of reserves results in the working balance reducing by £443k to £2,431k. There is the option to utilise more earmarked reserves to keep the working balance higher.

The Housing Revenue Account (HRA) is currently forecasting a deficit position of £113k. In year pressures associated with the cost-of-living crisis in respect of repairs and maintenance have resulted in a negative forecast.

The majority of projects are forecast to complete with an expected delay in some projects resulting in a budgetary impact of £18.643m below the budget. At this stage, this underspend will be considered as slippage into next year's programme.

The current financial backdrop poses further financial risks to the Council’s budget. It should be noted that the Local Government Association has issued a warning that ‘soaring inflation, energy prices and National Living Wage pressures are putting council services at risk’. For Brentwood, there is further financial risks to pay inflation forecasts as well as cost pressures from the current high rates of inflation that cannot be quantified at this stage. The high inflation rates, increasing bank rates and national living wage pressure will have further impact onto the ongoing budgets.

Whilst the Council is not anticipating the need to reduce any services, the financial position will have to be monitored over the year and will make the Medium Term Financial Strategy (MTFS) even more of a challenge to deliver.

Following discussion Cllr Kendall MOVED and Cllr Lewis SECONDED the recommendations in the report. Members voted UNANIMOUSLY and it was resolved:

The recommendation is for the report to be noted.

REASONS FOR RECOMMENDATIONS

Financial monitoring of the budget throughout the year complies with the duties under the Local Government Act 2003, the Housing Act 1985, the Local Government and Housing Act 1989 and the Local Government Finance Act 1992 and subsequent legislation.