Agenda item

Report from the Strategic Director for Finances and Customer Services.

Recommendations:

That Cabinet:

1.    Note the current General Fund Revenue Budget forecast overspend of £1.1m.

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 2023/24 financial position.

Consideration was given to the report which set out the financial position as at the end of November 2023 and forecast for the remainder of the financial year, based on actual costs and income for the first 8 months of 2023/24. As at November 2023, the Council Directorates currently estimated an overspend of £9.6m 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 on the economy, particularly on food prices, and the legacy impact of lockdown restrictions on some Directorate’s services, especially in Regeneration and Environment.

This was, however, offset by a £5m corporate budget risk contingency held within Central Services, approved within the Council’s Budget and Council Tax Report 2023/24. In addition, the Council was now able to report further savings from the Council’s Treasury Management Strategy of £3.5m, taken together, this £8.5m reported underspend in Central Services reduced the Council’s overall forecast outturn to a £1.1m overspend.

The current economic climate remained turbulent, with challenges in projecting where inflation would move and the pace at which it moved. Inflation was slowing although there were variances below the headline rate: food prices were starting to fall while 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.

There remained funding uncertainty for the local government sector beyond 2023/24 and 2024/25 as the Local Government Financial Settlement had been only a one-year allocation for both these years. The Council would continue to face significant challenges moving forwards in regard to the funding of Social Care. This was best illustrated by the volume of Local Authorities across the UK that had recently hit difficult times with a number having to issue S114 notices.

Although inflation appeared to be easing, 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, the majority of this was covered by the in-year savings within Treasury Management.

The Strategic Director of Finance and Customer Services confirmed that officers continued to work hard to reduce the £1.1m overspend. Councillor Roche praised the Finance Team and Councillor Alam for their management of the budget during difficult times.

Resolved:

That Cabinet:

1.    Note the current General Fund Revenue Budget forecast overspend of £1.1m.

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 2023/24 financial position.