Medway Council’s non-earmarked general fund reserves have been left a fraction above the minimum balance set by its section 151 officer at the end of financial year 2022/23.
A net overspend of £6.094m during the year had to be funded by the reserves – but the final position nevertheless represents an improvement of £6.239m compared to the projected status during Q3 budget monitoring, when £17.183m of general reserves was predicted to be required.
As at March 2022 the council had non-earmarked general fund reserves of £26.550m available to it. In order to fund the outturn position for 2022/23 the council will use a total of £10.947m of the available reserves, which includes the £4.853million built into the 2022/23 budget.
The council’s non-earmarked general fund reserves now stand at around £10.083m, with the minimum balance set at £10m.
Katey Durkin, Medway Council’s chief finance officer, advised in a revenue and capital budget outturn report to cabinet that “all current commitments” should now be reviewed against revenue reserves, “in the light of the financial risks confronting the council”.
The use of the reserves may impact the council’s financial resilience, she said, “as it will now be less able to withstand unexpected budgetary pressures”.
Durkin also reported that the 2022/23 outturn position includes pressures in a range of services that may be ongoing into 2023/24. “These may have not been adequately addressed in the budget for next year,” she warned.
Medway Council’s 2022/23 outturn position represents a net overspend on the cost of children’s and adults’ services of £18.041m, which was partially offset by net underspends on the cost of regeneration, culture and environment of £3.3349m, on business support services of £1.676m and on centralised services of £6.424m.
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Durkin also warned that certain council projects might “need to be curtailed or refinanced” if the council is unable to achieve the required capital receipts that primarily fund capital expenditure.
The figure’s included in Durkin’s report will form part of the council’s statement of accounts, which will be presented to its audit committee following the completion of external audit.
Medway Council’s current administration, led by Labour’s Vince Maple, was formed following the local elections held on 4 May 2023.
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