Agenda item

Report of the Corporate Director of Resources

The Cabinet considered a report of the Corporate Director of Resources which provided information on the following:

a)    the forecast revenue and capital outturn for 2023/24, based on the position to 30 June 2023;

b)    an update on the dedicated schools grant and forecast schools’ outturn as at 31 March 2024, based upon the position to 30 June 2023;

c)    the forecast for the council tax and business rates collection fund outturn at 31 March 2024, based on the position to 30 June 2023; and

d)    details of the updated forecast use of and contributions to earmarked, cash limit and general reserves in 2023/24 and the estimated balances that will be held at 31 March 2024.

The report sought approval of the revised 2023/24 capital programme, other budget adjustments and proposed sums treated as outside of the cash limit in year and provided an update on progress towards achieving MTFP (13) savings in 2023/24 (for copy of report see file of minutes).

In moving the report, Councillor R Bell, Deputy Leader of the Council and Portfolio Holder for Finance thanked officers for the very comprehensive and thorough report and budget managers right across the council for their continued focus on managing their areas.

The report acknowledged that the Council continued to operate in an environment of significant uncertainty and financial volatility, which highlighted why the Council must always maintain a strong grip on budgets.

Councillor R Bell highlighted that overspending in Children and Young People’s services was primarily due to overspends in looked after children placement budgets and the overspending in Regeneration, Economy and Growth was primarily due to underachievement of planning fee income and overspends in the Transport and Contracted Services.

The cash limit overspend in Children and Young Peoples Services, plus a range of other covid and inflationary pressures had been flagged by the Corporate Director total circa £15 million had been met corporately, funded from a combination of corporate contingencies and corporate underspends in capital financing budgets, and underspends against the energy budgets in year. Thankfully, the corporate underspends had largely offset the position.

It was pleasing to note that the MTFP forecasts considered in July had factored in the budget pressures exemplified in this report, though there were a number of areas which would require careful oversight in preparation for next year’s budget.

Councillor Bell informed Cabinet that many people commented on the size of reserves held by the Council. In highlighting this Councillor Bell commented that the Council were a huge organisation – the seventh biggest unitary council in the country, with an annual gross expenditure of £1.7 billion. Reserves were proportionate to our size and represented less than 10% of annual expenditure. Nearly £25 million (15%) of the £162.4 million of earmarked reserves the Council held were sums held on behalf of others.

Councillor Bell also provided updates in terms of the Collection fund forecasts and the amended Capital Programme, which following account re-profiling from last year, new grants and contributions secured since the budget was set and reprofiling into future years, resulted in a 2023/24 capital programme of circa £321.4 million this year.

In terms of delivery of MTFP savings this year at 30 June – a quarter of the way through the year – the Council had delivered around 44% of the £12.4 million of savings requirements for the year.

Councillor Bell concluded the report in explaining that the forecasts included the impact of a range of demographic and inflationary driven budget pressures, outside of the control of the Council which had placed pressures on the Council budgets. Where these pressures would have a continuing impact into next financial year Councillor Bell was satisfied that provision had been made for these in the MTFP14 forecasts considered in July.

Councillor A Hopgood, Leader of the Council also added her thanks to those of Councillor Bell and the Corporate Director of Resources and his team for this detailed report, and to all the budget managers across the Council for their continued effective management of their budgets in what were difficult circumstances.

Councillor Hopgood explained that managing budgets was difficult at the best of times due to the scale and complexity of the Council, however, it was particularly challenging against a backdrop of significant demand and volatility in our cost base.

Pay and price inflation, particularly the national pay awards, energy, waste and transport related costs had placed unprecedented pressure on budgets over the last 18 months.  Once again, the Pay Offer made by the Local Government Employers had significantly outstripped our budget provision in year, with a £3.7 million overspend expected this year.

Councillor Hopgood seconded the recommendations set out in the report at paragraph 25 including the amendments to the Capital Programme which would deliver an unprecedented £321.4 million of capital expenditure this year.

Resolved:

That the recommendations in the report be approved.