Issue - meetings

Report from the Strategic Director of Finance and Customer Services.

Recommendations:

That Cabinet:

1.    Note the current General Fund Revenue Budget forecast overspend of £6.1m.

2.    Note that actions will continue to be taken to reduce the overspend position but that it is possible that the Council will need to  ...  view the full agenda text for item 46

Consideration was given to the report which set out the financial position as at the end of July 2024 and forecast for the remainder of the financial year, based on actual costs and income for the first four months of 2024/25. Financial performance was a key element within the assessment  ...  view the full minutes text for item 46

Report from the Strategic Director of Finance and Customer Services.

Recommendations:

That Cabinet:

1.    Note the current General Fund Revenue Budget forecast overspend of £6.1m.

2.    Note that actions will continue to be taken to reduce the overspend position but that it is possible that the Council will need to draw on its reserves to balance the 2024/25 financial position.

3.    Note the updated position of the Capital Programme, including proposed capital programme variations to expenditure profiles and funding.

At the Chair’s invitation, the Cabinet Member for Finance and Safe and Clean Communities introduced the report and explained that the report set out the Council’s financial position as of July 2024, with an estimated overspend of £6.1 million for the financial year.

This was largely due to demand which had put additional pressures on children’s placements, adult social care packages, and home to school transport as well as the expected impact of the Local Government Pay Awards.

In addition, the Council had been impacted by inflationary pressures within the economy. Whilst the actual overspend of £17 million was concerning, it was stated that elements of the overspend had been forecasted and the two key budget contingencies were created as part of setting the Council’s Budget and Medium-Term Financial Strategy for 2024/25. The Council had set Social Care contingency of £3.4 million and a Corporate Budget Provision of £3.5million to support anticipated pressures across social care and home to school transport. The Cabinet Member explained that detailed review work of those services had begun, and operating improvements had been made to reduce cost pressures and create avoidance in further overspend.

The Council’s Treasury Management Strategy had continued to perform well as a result of the Councils’ approach to borrowing, which had been adapted to minimise its level of borrowing. Members were informed that this position had improved due to reprofiling of the capital programme delivery, which had pushed back the requirement to borrow more. It had been estimated that this would support the Council to generate savings of at least £4 million, however, Members were informed there was still a possibility that this figure could change due to market conditions which were beyond the Council’s control.

As a result of the corporate provision and savings, an underspend of £10.9 million had been forecasted within Central Services bringing the Council's net overspend to down to £6.1 million. The Overview and Scrutiny Manager Board (OSMB) was told that uncertainty still remained within the local government sector beyond the 2024/ 25 budgets, in relation to further allocation funding beyond one year. It was acknowledged that the financial challenges faced by the Council were the same challenges faced by other the councils across the country, with some local authorities even being issued with section 114 notices.

The Chair thanked the Cabinet Member for this overview and then invited the Strategic Director for Finance and Customer Services, Judith Badger to provide some further context. The Strategic Director for Finance and Customer Services felt it was important to emphasise the various budget contingencies put in place at budget setting, which were there as some overspend was expected.

OSMB was informed that while some of the overspends were expected, it was important to consider the context of why they had occurred. This was illustrated by an example in relation to the placement pressure on Children and Young People's services which had been managed through a long-term plan which had been in place for several years. This plan  ...  view the full minutes text for item 24