Agenda item

To consider a report from the Head of Democratic Services providing the Board with the latest update on the in year financial position in respect of the Revenue Budget and the Housing Revenue Account (HRA).

The Board received a report from the Head of Democratic Services providing the latest update on the in year financial position in respect of the Revenue Budget, the Dedicated Schools Grants (DSG) and the Housing Revenue Account (HRA).

In attendance for this item were:

·  Cllr Debra Coupar, Executive Member for Resources

·  Mariana Pexton, Director of Strategy and Resources

·  Victoria Bradshaw, Chief Officer – Financial Services

The Chief Officer – Financial Services, introduced the item setting out a projected overspend of £36.3m on the revenue budget in 2023/24, a slightly improved position on Month 9, with the main pressures being felt in the Children and Families directorate and the number and increasing costs of external residential placements in line with previous iterations of the report.

There have been savings in the Strategic Account budget that are being used to partially offset overspend in the Children and Families Budget. This in combination with use of one off funding from WYCA and use of most of the Merrion House reserves will enable the authority to deliver a balanced budget by the end of the financial year.

The HRA is projecting a balanced position by year end, but the Dedicated Schools Grant (DSG) has an in year pressure of £2.6m which will be offset by balances brought forward from the previous financial year. It was noted that the DSG will be a feature of the Financial Health reports in 2024/25 with action planning for those budgets also included.

The Board also heard that collection rates on Council Tax were lower than anticipated due to wider cost of living pressures but that business rate collection rates were above the anticipated rate.

In response to comments and questions from board members the following points were covered:

·  Given the cost pressures around Children Looked After budgets the Board asked whether there were any updates available since the Month 10 position which is the focus of this paper. In response the Board heard that external residential placement numbers (and CLA generally) were stabilising with external residential numbers fluctuating between around 142 to 146 placements. It was also noted that the issue with placements is primarily driven by increasing costs of placements as well as overall numbers.

·  The Board asked about the strategic accounts underspend and the quite significant underspend of over £10m. It was explained that these savings are made from debt savings on the capital programme, scheduling of borrowing requirements and using cash balances. In addition, with the possibility of reduced interest rates later in 2024 there could be further savings delivered through longer term borrowing at lower rates. Energy underspend due to falling prices is also a factor.

·  On procurement cards members asked about the changes that have been made to deliver savings and the possibility of officer time being wasted on authorisation processes. Whilst approval processes have been tightened these are based on essential spend requirements so where services do not have essential spend requirements purchasing cards cannot be used and have zero balances. This followed a review of purchasing cards at Chief Officer level to ensure that purchasing cards were only used for the delivery of essential services, in line with the freeze on non-essential spend.

·  Members raised a question regarding the Little Owls Nursery Service Review. It was noted that this issue falls under the remit of the Children and Families Scrutiny Board and can be picked up through the Principal Scrutiny Adviser.

·  The Board asked about staffing levels in adult social care and potential budget pressures in that directorate. In response the Board heard about regular monitoring and modelling approaches that have identified demand pressure as key issues in both children’s and adult social care and that these pressures are linked to national issues being felt across the local authority sector. The budget gap in 2024/25 was high due to expected demand pressures and additional resource required for these budgets.

·  The Chair asked if the plans to address the overspend through the Transport Levy funding, Merrion House Reserve and underspend on energy would be enough to bridge the projected gap in budgets and how much the underspend on energy is expected to be. In response the Board heard that the energy underspend is estimated at £3m but that was already being used to offset in year pressures and is part of the savings highlighted in the strategic accounts. The Board were reassured that through the WYCA funding and use of reserves as well as mitigation from under spending budgets in year the projected overspend will be addressed and a balanced budget delivered at year end.

·  The Executive Board Member for Resources emphasised the demand pressures being faced by the Council and the budget pressures that are being felt in a number of service areas. The final details on the 2023/24 financial year will be provided through the outturn reports.

Resolved:

Board Members noted the content of the report and appendix within the wider Board remit linked to financial sustainability and long-term budgetary robustness.