Agenda item

To consider the report of the Chief Officer, Financial Services on financial performance against the 2024/25 revenue budget following the first quarter of the financial year. The report also provides an update on the Quarter 1 position in respect of the Housing Revenue Account, the Schools Budget, the Council Tax and Business Rates Collection Fund and Treasury Prudential Indicators.

The Chief Officer Financial Services submitted a report presenting the Council’s financial position in respect of the 2024/25 revenue budget following the first quarter of the financial year. The report also provided an update on the Quarter 1 position in respect of the Housing Revenue Account, the Schools Budget, the Council Tax and Business Rates Collection Fund and Treasury Prudential Indicators.

In presenting the report the Executive Member provided an overview of the key points in which it was noted that as at Quarter 1, the Council was forecasting a General Fund overspend of £19.936m. The key areas of overspend were noted together with the reasons for those. The Executive Member also highlighted the range of mitigating measures being taken to address the overspend.

In response to a Member’s concerns about the projected overspend being reported at Quarter 1, the Board received detailed information on the complex challenges being faced together with the range of comprehensive actions being taken to address those challenges and to manage the financial pressures faced, with specific reference made to the work that continued to be undertaken in respect of the services within Children and Families directorate.

Regarding a specific enquiry on the projected overspend within the Adults and Health directorate, the Board received further detail on the key causes of that projected overspend. It was noted that higher than anticipated demand in relation to working age adults was a key factor that remained ongoing, and it was noted that this was not a unique trend to Leeds. Details of the range of work undertaken as part of the budget preparation and also in response to the current position were highlighted.

Also, noting that the report reflected the budgeted assumption of a 3.5% pay increase, an enquiry was raised about the potential impact on the budget should the pay award be higher. In response, it was noted that the JNC pay award had been agreed at 2.5%, whilst the NJC pay award was still being negotiated.  In response to a further enquiry, it was undertaken that the Member in question would be provided with details of the potential impact upon the budget, should the NJC pay award be at a level of 5.5%.

Also in response to a Member’s enquiry, the Board was provided with further details on the range of actions that would continue to be taken to address the currently projected overspend in-year and look towards budget setting processes for future years. It was noted that this issue continued to dominate discussions, and whilst it was a challenging situation for all employees, it was highlighted that there was a commitment for the Council to do everything that it could to operate within its budget. It was also noted that such matters would continue to be reported to Executive Board, as appropriate.

Members also discussed the national position in relation to Local Government funding arrangements moving forward, given the recent change in national Government.

RESOLVED –

(a)  That as presented within the submitted report, it be noted that at Quarter 1, the Authority’s General Fund revenue budget is reporting an overspend of £19.936m for 2024/25 (3.2% of the approved net revenue budget) after the application of reserves and within a challenging national context, with it also being noted that a range of actions are being undertaken to address this position;

(b)  That as presented within the submitted report, it be noted that at Quarter 1, the Authority’s Housing Revenue Account is reporting a balanced position;

(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 this reported financial position, with it also being noted that these pressures will continue to be reviewed during the year and reported to future Executive Board meetings as more information becomes available. That it also be noted 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 agreed by Executive Board in February 2024 through the annual Revenue Budget report;

(e)  That as presented within the submitted report, the quarterly analysis of the Prudential Indicators be noted, specifically that the actual gross and net debt for the Council in 2024/25 to date remain comfortably within both the Operational Boundary and the Authorised Limit set by Council.