Agenda item

2nd Quarter Revenue Monitoring Report 2022/23

To consider a report from the Director for Digital, Sustainability & Resources, a copy is attached as item 6.


Before the Committee was a report by the Director for Digital, Sustainability & Resources, presented by the Cabinet Member for Resources, copies of which had been circulated to all Members and a copy of which is attached to the signed copy of these minutes as Item 6.


The report updated the Worthing Joint Strategic Sub-Committee with the latest expenditure and income projections for both Adur District Council and Worthing Borough Council for the current financial year 2022/23, compared to the Revenue Budget approved by both Councils in February.  Whilst the 'spend to date' was the position as at the 30th September 2022, the forecast outturn position reflected the latest information available to ensure an up-to-date forecast was presented.


As at quarter 2, the current outturn projection for the 2022/23 financial year for the Worthing Borough Council General Fund was a net overspend after reserve transfers of £2.017m. A breakdown was set out in section 4.4 of the report.


The following pre-submitted questions were received in advance of the meeting:-


Q1 - The 2nd quarter revenue monitoring report provides some sober reading, this is an authority that went into 2022/23 with a balanced budget, including agreed savings of £1.136M and yet only a matter of a few months later is now forecasting an overspend of £2.017M.


At section 4.13.3 you outline the council’s financial sustainability, here it states that:


The level of earmarked reserves will reduce if they are required to meet the overspends currently forecast for the year. This is a particular issue for Worthing where the level of available reserves (excluding the Business Rates Smoothing Reserve, the Tax

Guarantee Reserve and Grants and Contributions) will be reduced significantly. The predicted level of reserves undermines the Councils financial stability and potentially puts Worthing Council in an unsustainable financial position.


Clearly a lot of people reading this report will be rightly alarmed by this language as it indicates that if savings cannot be found, that either council fees or tax will have to rise significantly or services cut dramatically to provide a balanced budget or you have to raid the council’s reserves and leave it with a perilously low level of reserves for future years.


So can you please elaborate further on this and in doing so, advise members of the public when you or the Chief Financial Officer will be able to say with confidence that the Council’s financial position is sustainable, that their public services are no longer at risk and given the Council’s current financial position, in terms of risk, how would you describe the council's current financial sustainability risk rating;  High, Medium or low ?


Officers replied that 2022/23 had been an extremely difficult year, with many other Councils in a similar position. The situation was made more challenging in Worthing due to the levels of reserves held, which were not as significant as some neighbouring authorities. If the forecast is correct, experience indicates that the position should generally improve during the financial year, although it had been a highly unusual year due to the financial shocks experienced. However, the Council would have a very low level of reserves. This would be ok as long as the Council did not experience another year like this one and took proactive steps to improve the position. There was no absolute level of reserves the Council needed to hold, guidelines suggest that it should be holding around 6% as a minimum. The Council was below this level. Therefore urgent action was necessary to improve the position going into the next financial year.         


Q2 - In Appendix 1 at para 1.1 you identify that there are :


In addition there are unbudgeted cost pressures of £99,000 associated with transactional fees on electronic payment methods.


Previously this council has driven car park users down the electronic payment route as a preferred method of payment, how or why was this associated cost not factored into the  budgetary planning or cost of introducing this payment method.


Officers replied that the Council had seen an accelerated trend towards electronic payments, almost certainly as a result of the pandemic. Up until this financial year, the Council had a very suppressed level of both income and associated fees so it hadn’t been immediately apparent. As income levels had begun to return to normal, the Council was seeing a trend and needed to adjust as part of the development of the 2023/24 Revenue Budget.  


Q3 - Para 1.5


It is good to read that this administration is building on the work of the previous administration and continuing to invest in property in Worthing that will create a revenue return to this authority. Clearly the declaration in this report of Southern House having been purchased has now placed this information in the public domain, from what was previously confidential material. Can you please advise the public how much this authority spent on purchasing Southern House?


* The Monitoring Officer advised that the information within the report remained exempt, however, the information requested was now within the public domain and no longer exempt.  


The Cabinet Member replied that the overall cost of the acquisition was £22,323,000 which included all associated costs (stamp duty land tax and professional fees).


The recommendations in the report were proposed by Councillor Turley, seconded by Councillor McCabe and unanimously supported.    




The Worthing Joint Strategic Sub-Committee noted the contents of the report and projected outturn position for the Joint Committee and Worthing Borough Council against the approved revenue budgets and proposed use of reserves (Appendix 2b).




The call-in deadline for the decision will be 5.00pm on the 15th December 2022.

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