Agenda item

Report from the Strategic Director for Finance and Customer Services.

Recommendations:

That Cabinet:

1.    Note the current General Fund Revenue Budget forecast overspend of £4.2m.

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 2023/24 financial position.

3.    Approve the proposed changes to In-House Fostering Fees and Allowances as set out in section 2.74.

4.    Note the local flood recovery financial support and the wider Government funded schemes, as set out in section 2.76.

The report set out the financial position as at the end of September 2023 and forecast for the remainder of the financial year, based on actual costs and income for the first six months of 2023/24. As at September 2023, the Council estimated an overspend of £4.2m for the financial year 2023/24. This was largely due to demand led pressures on Children’s residential placements and home to school transport as well as the impact of inflationary pressures in the economy, particularly on food prices, and the legacy impact of lockdown restrictions on some directorate’s services, especially in Regeneration and Environment.

The economic climate remained turbulent, with challenges in projecting where inflation would move and the pace at which it would move. Inflation was slowing although there were variances below the headline rate: food prices were starting to fall but petrol and diesel prices were increasing. The overall reduction would help support the Council’s Budget for 2023/24 but the position would be closely monitored.

As the Local Government Financial Settlement was only for one year, it would lead to uncertainty for local government beyond 2023/24. There would be significant challenges regarding funding of social care. This was illustrated by the volume of Local Authorities having to issue S114 notices which indicated that a council's forecast income was insufficient to meet its forecasted expenditure for that year.

The Local Government Association (LGA) Pay Award had been agreed and the full financial impact was £4m greater than was assumed within the Budget for 2023/24. However, it was anticipated that this could be funded through temporary savings within Treasury Management.

In order to support improved levels of new foster carers and greater retention of existing foster carers, a series of amendments and new foster care fees and

allowances were proposed. The financial impact of these would be mitigated by the cost avoidance that they would generate by creating new foster carers or retaining them and therefore limiting the need for more expensive external placements. The table at paragraph 2.74 of the report outlined the new and amended proposals to fostering allowances and payments to support Rotherham in the recruitment and retention of in-house foster carers.

Following the flooding event within the borough on the 21 October 2023 and the significant impact on a number of households, the Council was providing immediate financial support to those residents most impacted. The Council’s financial support to help residents impacted by Storm Babet would include a £350 grant direct to each flooded household and a promise that those households would not have to pay any Council Tax for the period from 21 October until at least the end of March 2024. Further information relating to the flooding event and the support being offered was set out in paragraph 2.76 to 2.81 of the report.

A further report would be presented to Cabinet in January 2024 which could present a more certain picture of the Council’s Directorate financial position and the impact on the Council’s Medium Term Financial Strategy.

During the meeting, the Strategic Director of Finance and Customer Service confirmed that a significant number of residents impacted by the floods had already received the grant. The Strategic Director of Children and Young People’s Services confirmed that the amendments and new foster care fees and allowances were necessary to stay abreast of local competition and match other local authorities. Changes were already having a positive impact on the level of foster carers.

Resolved:-

That Cabinet:

1.    Note the current General Fund Revenue Budget forecast overspend of £4.2m.

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 2023/24 financial position.

3.    Approve the proposed changes to In-House Fostering Fees and Allowances as set out in section 2.74.

4.    Note the local flood recovery financial support and the wider Government funded schemes, as set out in section 2.76.