Council updates on finances amid challenging national picture
First formal financial update since the 2022/23 budget was agreed in February
Wiltshire Council has provided its first formal financial update since the 2022/23 budget was agreed in February, as it looks to continue to provide high-quality services while mitigating the increased challenges brought on by inflation, the cost of living, and the changing national picture.
In February, the council set its 2022/23 budget, which ensured that vital services to the residents, businesses and communities of Wiltshire will continue to be provided while also delivering on the commitments as set out in council's Business Plan and making significant savings.
With the completion of the first quarter of the financial year, the most significant pressure to the budget is being brought on by the high level of inflation that the country is currently experiencing. The original assumption when the 2022/23 budget was set and agreed was that contractual inflation for the financial year would be around 4% and pay inflation at 2% and council budgets were aligned to that accordingly. The current Consumer Price Index (CPI) stands at 9.9%.
Currently, the council is forecasting an overspend of around £12.4m, but mitigations actions will reduce that to around £6m. This is a forecast overspend, and depending on service demand and inflation the position could further deteriorate, however the Council has prudently set aside £9m in reserves to deal with the inflation pressure on a one off basis in this financial year.
As at the end of June, the council had already achieved more than 45% of its identified savings target for 2022/23, which equates to around £11.3m. As it stands, £21m, which is around 84% of the total savings that need to be made, is forecast to be achieved by the end of the financial year. The council is assessing its approach and the options available to ensure the rest of the gap is bridged before the conclusion of the financial year.
Despite the challenges, the council continues to invest in key programmes, and it has provided an update on its capital programme budget, which is spent on projects to improve and maintain the county's infrastructure.
The capital budget for the financial year ahead was confirmed in February at just over £307m but, since then, around £79m of that has been reprogrammed into future years to align with project schedules. Some of the investment to be carried out includes maintenance projects at schools, the ongoing Silverwood School build programme, the now completion of the already hugely popular Melksham Community Campus, the Salisbury and Trowbridge Future High Street Fund projects, as well as continued council house building and footpath and highway improvements throughout the county.
Cllr Nick Botterill, Wiltshire Council Cabinet Member for Finance, said:
"This continues to be a really challenging time for all given the often volatile and unpredictable nature of the national financial picture. However, we're continuing to monitor our own financial situation in a transparent and robust way to ensure that we're in the best possible position to quickly adapt to any quickly changing situation or issues that may arise.
"As stated in our Business Plan, we want to deliver value, which, given the increasing cost of living, is more important now than ever. And we'll continue to provide the quality services that our residents rely upon, looking at ways we can invest in and improve the county while focussed on the bigger picture and not just short-term fixes.
"Given the level of inflation and cost of living crisis times are undoubtedly difficult for everyone, and the council's financial position is no different, however we have prudently set aside one off funding to deal with the inflation pressure this financial year. We'll continue to manage the position and keep people updated as we progress during this financial year."
The updates were presented at Wiltshire Council's cabinet meeting which took place on 27 September. The full reports can be found at Agenda for Cabinet on Tuesday 27 September 2022, 10.00 am | Wiltshire Council.