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.

The Chair invited Councillor Alam, Cabinet Member for Finance and Safe and Clean Communities to introduce the report and provide the relevant context.

The report outlined the financial revenue capital outturn position for the Council for 2023-2024 and described the detail of the reserve balance at the end of the financial year. The Council set a revenue budget of 3.2 million and a four-year Capital Programme with a cost of 6.10 million. The report was the final report in a series of financial monitoring reports to Cabinet and set out the year end revenue budget outturn position, in light of actual costs and income. The Council had an overspend position of 8.8 million before mitigation, this was due to significant pressures, demand on market placements across social care, home to school transport, and inflation remaining high in 2023-2024. It was advised that pressures were forecast to reduce by saving via central services and the use of the corporate budget risk contingency plan of 8.7 million. During 2024 the Council delivered agreed savings to help mitigate some of the forecast pressures which had risen from wider financial impacts and as a result the final outturn improved to 0.1 million from 1.2 million. The Council's final overspend position of 0.1 million had been funded by treasury management savings. Funding uncertainty remained for the local government sector beyond 2024 and the Council would continue to face significant challenges moving forward in social care funding. The Council was in a stable position in comparison to other local authorities.

The Chair invited the Director of Finance and Customer Services and the Assistant Director of Financial Services to present the report.

The Council anticipated potential future budget pressures throughout the budget setting process, this contributed to a positive end outturn. There were pressures in certain parts of the Council and mitigation in place within the budget to account for the ongoing pressures. The main pressure areas were children’s placements and home to school transport, work was on-going to monitor the pressures and to develop a final settled budget for those areas. Treasury management helped and supported the pressures on an on-going basis, via tight management of cash flows and dependency on interest rates.

Councillor Blackham asked officers whether there was any significant pressure building on next year’s budget, as the main part of this year’s mitigation had been the treasury management of 3.7 million, which was dependent on interest rates and cash balances available. The Assistant Director for Financial Services advised that the treasury management savings were expected to be available during the current financial year, interest rates were high and cash balances were still available, therefore a benefit could continue to be generated for the Councils treasury management services, which would help to support the Councils overall position. Treasury management was not a long-term solution to the Councils budget pressures; therefore, recovery plans were being addressed to bring services back into budget.

Councillor Carter queried why the report framed the use of using fewer reserves than anticipated, as a positive outcome as he felt it should not be portrayed this way. The Director of Finance and Customer Services advised that when the budget was set, the Medium-Term Financial Strategy was also set, this looked at a plan over several years based on what the Council believed would be the financial position going forward, on the best information available at the time. This was the reason why the Council was in a more stable and safe position that other Councils because decisions had been taken in budget setting to account for the next few years in advance. It was a positive outcome as the Councils reserves were protected for future management to ensure the Council would not have to react on an annual basis and potentially cut services.

Councillor Carter asked if there had been any indication from the Government of what a local government settlement would look like in future years. The Director of Finance and Customer Services advised that officers had not had any indication from the newly formed government so far.

Councillor Yasseen queried the delays referenced within the report, an example was provided of Forge Island and asked officers how many of the delays on large infrastructure projects were due to the need for tighter management controls and whether the delays were unavoidable from a financial perspective. The Assistant Director for Financial Services advised that there was a challenging market for all local authorities, the market had been flooded with capital delivery which created a difficulty to obtain contracts. The Council were occurring additional costs as a result of inflation and market prices, which was causing the requirement for the scope and design of projects to be re-evaluated due to the costings, this led to inevitable delays in projects. A review of governance processes was underway to improve how projects were scoped out, designed, and delivered internally to ensure capital procedures were more robust and effective. In relation to the capital outturn position, the level of delivery was increasing every year.

Councillor Yasseen queried the savings profile of the Adult Social Care Service, in particular the employee vacancies and the budget underspend in this area and asked why the Council were not maximising the budget to meet the needs of the residents of Rotherham. The Director of Finance and Customer Services advised that it was noted that across all local government areas there was difficulty in obtaining employee’s and vacancies were often a result of services being unable to recruit to positions.  Adult Social Care had received additional money into the service throughout the financial year, via one-off funding arrangements and an additional 12.5 million pounds via the 2023-2024 Budget Plan, this had influenced the slight underspend and was driven by need and market prices.

Councillor Marshall queried the cost of hiring employees via agencies. Officers advised that agencies were used as a last resort to address service needs, if the traditional recruitment process was unsuccessful after a number of times. The Chair advised that the Joint Consultative Committee had raised the issue of agency employees, and this would be considered as an item for the Scrutiny Work Programme.

Resolved:- That Cabinet be advised that the recommendations be supported.

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.