Agenda item

The Committee had before it a report by the Director of Resources which provided details of the financial position of the Council as at Quarter 2 (30 September 2022) and the full year forecast position for the financial year 2022/23, including:-

·       General Fund and Housing Revenue Account (HRA) and capital accounts; and associated Balance Sheet; and

·       Common Good revenue account and Balance Sheet.

The report recommended:-

that the Committee –

(a)      note the positive cash position that has been achieved for the General Fund and HRA to the end of Quarter 2 as detailed in Appendix 1;

(b)      note the Common Good financial performance to the end of Quarter 2 as detailed in Appendix 3, specifically the £3.7m reduction in cash balances due to investment volatility;

(c)      note that the General Fund full year forecast position, as detailed in Appendix 2, is expected to show a deficit of £4.4m for 2022/23, and that the Chief Officer – Finance is instructing that budget holder act to delay, stop or reduced expenditure wherever possible to mitigate this deficit; and note that any remaining deficit will be mitigated from the use of earmarked reserves;

(d)      note that the HRA full year forecast position, as detailed in Appendix 2, is on target to achieve the approved budget, making a contribution to HRA reserves for 2022/23;

(e)      note that the Council relies on the Integration Joint Board (IJB) achieving a balanced budget, and that the IJB retains reserves to mitigate unplanned additional costs arising during the year; and

(f)       note that the forecast for General Fund and Housing capital expenditure is that there will be lower spend than had been budgeted in 2022/23 as described in Appendix 2.

The Convener, seconded by the Vice Convener, moved:-

that the Committee approve the recommendations contained within the report.

Councillor Grant, seconded by Councillor Macdonald, moved as an amendment:-

           That the Committee:-

(1)        note the officer recommendations at 2.1 to 2.6 and thanks officers for presenting a positive cash position up to the Quarter 2 period;

(2)        note the challenges highlighted within the report which are contributing to budget pressures and the instruction by the Chief Officer – Finance to service budget holders to act to delay, stop or reduce expenditure wherever possible to mitigate the reported deficit;

(3)        agree that members require to be advised, through a Service Update from the Chief Officer - Finance, of the implications of this instruction and the methodology for determining what expenditure will be delayed, stopped or reduced and where this is most likely to occur. Instructs the Chief Officer - Finance to include within the Quarter 3 Financial Performance report to the February meeting of the Committee, a summary of the impact this instruction has had on the financial position and service delivery;  Agrees that in relation to recommendation 2.3, the Chief Officer – Finance consults with the Convenor and Vice-Convenor of the Finance and Resources Committee where any such proposal to delay, stop or reduce expenditure risks having a materially adverse impact upon a council service;

(4)        note the significant role that Aberdeen City continues to play in providing refuge and much needed support to many Ukrainian families and that on 3 August 2022, the City Growth and Resources Committee agreed to Aberdeen Labour’s request to add the following:

        In light of the longer term proposals to accommodate these citizens, instruct the Chief Officer – Early Intervention & Community Empowerment to prepare a report on the wider supply of critical services and opportunity for Ukrainian citizens to ensure that sufficient supply is available and Ukrainian citizens have access to good quality living and access to opportunity.

(5)        note that officers have highlighted in the report that this support has contributed to an increase in demand for Council services and instructs the Chief Officer - Finance to establish the overall cost of coping with this increased demand and seek support from both the Scottish and UK Governments to help offset this cost pressure;

(6)        note that the First Minister Nicola Sturgeon MSP has recommitted to expanding free school meals for P6/7 pupils within the programme for government after failing to implement the policy by their previous timescales. Notes that in August 2022, SNP and Liberal Democrat Councillors refused to support Aberdeen Labour’s call to re-appraise the original estimate of £11 million of capital funding required to expand school catering, dining facilities and equipment in order to ensure that it can implement the expansion. Agrees, in light of current pressures on the Council’s budget, to instruct the Chief Officer – Corporate Landlord to  proceed with the re-appraisal, submit this to the Scottish Government and seek an urgent update from the Scottish Government on the timescales for implementation; and

(7)        note with concern the “new risks around capital projects” (page 60 of the agenda) which have been highlighted which cast further doubt into the Administration’s commitment to delivering on their suite of new infrastructure pledges and , in line with previous information contained in the Medium Term Financial Strategy, expect the detail of their plans to be set out in their budget proposals at the Council Budget Meeting on 7 March 2023.

On a division, there voted:- for the motion (8) – the Convener, the Vice Convener and Councillors Cooke, Fairfull, Greig, Hutchison, Nicoll and Radley; for the amendment (5) – Councillors Blake, Farquhar, Grant, Macdonald and Massey.

The Committee resolved:-

(i)       to approve the motion;

(ii)       to note that the Chief Officer – Finance agreed to circulate to members, details of the pre-pandemic figures compared to the current year in respect of car parking income (on and off street); and

(iii)      to note that in relation to the rising costs of supplies and materials in the building/construction sector, the Chief Officer – Finance would consider how best the impact in real terms for tenants could be captured as part of the budget setting process.