Agenda item

Report from the Strategic Director of Finance and Customer Services.

Recommendations:

That Cabinet:

1. Note the current General Fund Revenue Budget forecast overspend of £3.1m.

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.

Consideration was given to the report which was the fifth financial monitoring report for the 2024/25 financial year. As at December 2024, the Council currently estimated an overspend of £3.1m for the financial year 2024/25. This was largely due to demand led pressures on children’s residential placements, adults social care packages, home to school transport and the impact of the Local Government Pay Award. In addition, the Council was still impacted by the inflationary pressures in the economy. Even though inflation had fallen to 2.5%, the Council’s base costs had significantly increased across the recent high inflation period by well in excess of 20%.

Whilst the Directorate overspend, which stood at £15.2m was concerning, it had reduced from a peak of £17.2m. As a result of these cost pressures the Council had been working on budget recovery plans to reduce the overspend in year and minimise the year end requirement for reserves. In addition, elements of this overspend were forecast with two key Budget contingencies created as part of setting the Council’s Budget and Medium Term Financial Strategy (MTFS) for 2024/25. The Council set a Social Care Contingency of £3.4m and a Corporate Budget Provision of £3.5m to support anticipated pressures across Social Care and Home to School Transport, whilst detailed review work of these services was undertaken, and operational improvements are delivered to reduce cost pressures and create cost avoidance.

The Council’s Treasury Management Strategy continued to perform well with the Council’s approach to borrowing adapted to minimise the level of borrowing and borrow short term, to ultimately minimise interest costs. It was estimated that this should see the Council generate savings of at least £5.1m for 2024/25, though again market conditions were out of the Council’s control.

It was noted that the Capital Programme Update could be found on pages 134 to 139 of the report.

Resolved:

That Cabinet:

1. Note the current General Fund Revenue Budget forecast overspend of £3.1m.
   
   
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.