Agenda item

To consider the report of the Chief Officer Financial Services which presents an update on the financial position of the Authority, as at the end of the first 7 months of the 2023/24 financial year.

The Chief Officer Financial Services submitted a report which presented the Council’s financial position as at the end of the first 7 months of the 2023/24 financial year. Specifically, the report reviewed the current position against the 2023/24 Budget and provided an update in respect of the Housing Revenue Account (HRA) and the Council Tax and Business Rates Collection Fund.

In presenting the report the Executive Member provided an overview of the key points which included the current forecasting of an overspend of £35.3m for the General Fund as at month 7 of the financial year.

In considering this, specific reference was made to the increased demand that continued to be experienced in services relating to Children Looked After. Regarding the national arrangements for the provision of funding for Local Authorities in this area, Members received an overview of the actions that continued in raising the Government’s awareness of the issues being experienced across the sector. Also, the importance of the cross-party and collective approach being taken towards such matters was highlighted, with an undertaking that this dialogue would continue.

A Member highlighted concerns regarding the management of the budget pressures that continued to be felt within the Children and Families directorate. In response, the Board was assured that the management of this was the priority issue for the Council’s leadership team and whilst the range of cross-directorate activity would continue to address the budgetary challenges faced wherever possible, the Council would continue to deliver its safeguarding responsibilities. It was also confirmed that appropriate political oversight of the actions being taken was in place. The scale of the challenge was emphasised, and as a result it was highlighted that the actions being taken were part of a wider approach towards the stabilisation of the directorate budget.

It was also reiterated that the challenges being faced in Leeds were not a result of the way in which such matters were being managed but were part of the impact felt nationally as a result of significant increases in demand and costs, together with the increased complexity of need that continued to be experienced. An overview of the key reasons for that increased demand was provided together with examples of where significant increases in costs were being experienced. 

RESOLVED –

(a)  That it be noted that at Month 7 of the financial year (October 2023) the Authority’s General Fund revenue budget is forecasting an overspend of £35.3m for 2023/24 (6.2% of the approved net revenue budget) within a challenging national context, with it also being noted that a range of actions are being taken to address this position. However, that it also be noted that reserves will have to be used to mitigate any forecast overspend at the year end;

(b)  That it be noted that at Month 7 of the financial year (October 2023) the Authority’s Housing Revenue Account is forecasting an overspend of £1.3m for 2023/24 (0.5% of the approved gross expenditure budget);

(c)  That it be noted that known inflationary increases, including demand and demographic pressures in Social Care, known impacts of the rising cost of living, including the NJC pay settlement of £1,925 and the JNC pay settlement of 3.5%, have been incorporated into the reported financial position, as submitted. That it also be noted that these pressures will continue to be reviewed during the year and reported to future Executive Board meetings as more information becomes available, and that proposals would need to be identified to absorb any additional pressures;

(d)  That it be noted that where an overspend is projected, directorates, including the Housing Revenue Account, are required to present action plans to mitigate their reported pressures and those of the Council’s wider financial challenge where possible, in line with the Revenue Principles as agreed by Executive Board in February 2023 through the annual Revenue Budget report.