Agenda item

Report from the Strategic Director of Finance and Customer Services.

Recommendations:

That Cabinet:

1.    Note the revenue outturn position.

2.    Note the budgeted transfer to HRA reserves increased by £4.7m following the revenue and capital outturn positions.

3.    Note the carry forward of the combined schools balance of £2.2m in accordance with the Department for Education regulations.

4.    Note the reserves position set out in paragraphs 2.52 to 2.57.

5.    Note the capital outturn, funding position and programme variations as set out in paragraphs 2.58 to 2.97.

6.    Approve the capital budget variations as detailed in section 2.80 of the report.

Consideration was given to the report which outlined the final revenue and capital outturn position of the Council for 2023/24. The Council set a balanced budget position for 2023/24 as part of the Budget and Council Tax Report 2023/24 which was approved at Council 1 March 2023. A Revenue Budget of £302.2m was set for General Fund services; this excluded schools’ budgets and the Housing Revenue Account (HRA). The Medium-Term Financial Strategy (MTFS) contained within that report included a balanced position for 2023/24, 2024/25 and a funding gap of £1.7m for 2025/26. This Budget and MTFS position was based on sound financial assumptions at the time, factoring in cover for service demand pressures in particular within Adult Social Care.

However, the Council had seen significant demand and market pressure challenges across Social Care and Home to School Transport along with inflation remaining high for most of 2023/24. High inflation had continued to cause market pressures driving up supplier prices along with energy prices remaining high compared with historical trends, despite prices falling during the year. Those pressures had seen the Council’s base costs rise further, not only through the Council’s own costs increasing for example, through increased energy bills, but the price of goods and services the Councils procured had increased.

The December Financial Monitoring Report 2023/24 submitted to Cabinet on 12 February 2024 outlined that the Council anticipated an overspend of £1.2m. This forecast position was also outlined in the Budget and Council Tax 2024/25 report which was submitted to the same Cabinet meeting and also to Council on 1 March 2024. The overspend was proposed to be funded from the Budget and Financial Strategy Reserve. However, the report noted the Council’s intention was to further improve that outturn position, if possible, which would see a lower value call on reserves.

During 2023/24 the Council had successfully delivered agreed savings to help mitigate some of the forecast cost pressures which had arisen from the wider financial impact of inflation, demand led pressures on children’s residential placements and Home to School Transport, along with legacy impact of lockdown restrictions on some directorate’s services, particularly in Regeneration and Environment (R&E). As a result, the final outturn was improved to £0.1m, down from £1.2m as reported to Cabinet in February 2024, reducing the Council’s call on reserves. The Council’s final overspend position of £0.1m had been funded by the Treasury Management Savings Reserve and the Council also used £1.4m of reserves to support the Budget, as approved within the Budget and Council Tax Report 2023/24.

The Housing Revenue Account had an underspend of £4.5m. As a result of this the HRA was able to transfer to reserves £4.5m, instead of drawing down £200k, an improvement of £4.7m. This would help the HRA to mitigate the financial challenges presented by increased maintenance requirements over the medium term.

The capital outturn showed slippage and underspend of £11.7m against the Budget for 2023/24 included within the Capital Programme. However, capital expenditure (programme delivery) in the year had achieved a higher level than in previous years at £140.7m, an increase of £10.4m or 8% over the 2022/23 outturn of £130.3m.

A surplus balance position of £2.2m was reported for all 25 maintained schools in Rotherham for 2024/25. There had been a noticeable reduction (£0.7m) in overall school surplus balances when compared to the previous year which could be attributable to the increased cost pressures that schools were facing. There were 3 schools that reported a year-end deficit totalling £0.3m. A budget recovery plan would be agreed with those schools to bring the budget back into a surplus position within an agreed timeframe.

The Budget and Council Tax Report 2023/24 approved the use of £6.3m from Treasury Management Savings Reserve to support the Budget Strategy. Due to the strong position on Treasury Management during 2023/24 the requirement for a transfer from the Treasury Management Savings Reserve had been reduced to just £0.8m, £5.5m less than had been assumed in the  Budget and Council Tax Report 2023/24. The total of Corporate Reserves balance at the Financial Outturn 2023/24 was £59m, which was £9.6m more than the £49.4m estimated in the Budget and Council Tax 2023/24 report. The Budget and Council Tax Report 2024/25 planned for £4.2m use of reserves in 2024/25. Based on the 2023/24 financial outturn position, that would leave a total of £54.8m Corporate Reserves at the end of the 2024/25 financial year.

Details on capital budgets variations were detailed in section 2.80 of the report and covered the following schemes: Rotherham Country Parks; Parkgate-Eastwood Bridge; The Alma; Castle View Adult Care Elements; Packman Road; Wath Library and Dinnington Principal Areas of Growth. Appendices 1 to 4 gave a detailed breakdown of the Capital Programme 2024/25 to 2027/28.

Councillor Alam wished to place on record his thanks to the Strategic Director of Finance and Customer Services and her team for their hard work.

The report was considered by the Overview and Scrutiny Management Board (OSMB), who advised that the recommendations be supported. Councillor Steele, Chair of OSMB, confirmed that agency staffing would be added to the Overview and Scrutiny Work Programme.

Resolved:

That Cabinet:

1. Note the revenue outturn position.

2. Note the budgeted transfer to HRA reserves increased by £4.7m following the revenue and capital outturn positions.

3. Note the carry forward of the combined schools balance of £2.2m in accordance with the Department for Education regulations.

4. Note the reserves position set out in paragraphs 2.52 to 2.57.

5. Note the capital outturn, funding position and programme variations as set out in paragraphs 2.58 to 2.97.

6. Approve the capital budget variations as detailed in section 2.80 of the report.