Report from the Strategic Director for Finance and Customer Services.
1. Note the current General Fund Revenue Budget forecast overspend of £4.5m.
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 capital budget variations as detailed in section 2.61 of the report.
The Chair invited the Leader to introduce the report. The report set out the financial position as at the end of July 2023 and forecast for the remainder of the financial year, based on actual costs and income for the first four months of 2023/24. Financial performance was a key element within the assessment of the Council’s overall performance framework and essential to achievement of the objectives within the Council’s policy agenda.
As at July 2023, the Council estimated an overspend of £4.5m 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 R&E. The current economic climate remained turbulent, with challenges in projecting inflationary movements. At present inflation was showing signs of slowing owing to reductions in energy and fuel prices. This would help support the Council’s Budget position for 2022/23, though it was too early in the financial year to be clear on its full benefit.
The Chair invited questions from Board Members and a discussion on the following issues ensued:
· Clarification was sought on the use of hotels to house homeless people and if a decrease in expenditure was expected in the next quarter. It was outlined that there were 40 additional emergency placements to meet some demand, however, there were greater numbers of people requiring support.
· Further details were sought on reducing the use of agency staff. It was outlined that efforts were made to start the recruitment process for vacant posts promptly to reduce reliance on agency posts. There had been a number of in-depth reviews that had led to agency cost reductions.
· Clarification was sought on what efforts had been made to identify other areas for possible savings. It was confirmed that there was a continuous process of check and challenge to identify budget pressures and opportunities for additional funding or savings.
· The high costs relating to children’s social care were noted, further details were sought on the reasons behind this and what was being done to address the issues. It was outlined that there was enormous competition for available places and private providers had raised prices in light of demand. An overview of the in-house residential placement programme and fostering campaigns were outlined. The demand pressures placed by accommodating unaccompanied asylum seekers were referenced.
· It was noted that the ‘invest to save’ budget decisions taken in previous years, had led to a reduction in overspends.
· The Fostering Service was praised for its work.
1. That Cabinet be advised that the following recommendations be supported:
1) Note the current General Fund Revenue Budget forecast overspend of £4.5m.
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) That Cabinet approve the capital budget variations as detailed in section 2.61 of the report.