Agenda item

To consider the report of the Interim Assistant Chief Executive – Finance, Traded and Resources providing an update on the Council’s financial performance against the 2024/25 revenue budget. The report also provides updates on the September (Month 6) position in respect of the Housing Revenue Account (HRA), the Schools Budget (DSG) and the Council Tax and Business Rates Collection Fund.

The Interim Assistant Chief Executive – Finance, Traded and Resources submitted a report providing an update on the Council’s financial performance against the 2024/25 revenue budget. The report also provided updates on the September 2024 (Month 6) position in respect of the Housing Revenue Account (HRA), the Schools’ Budget (DSG) and the Council Tax and Business Rates Collection Fund.

In presenting the report, the Executive Member provided an overview of the key points in which it was noted that as at month 6 of the financial year, the Council was forecasting a General Fund overspend of £22.9m. The Executive Member also noted how the report provided detail on the range of mitigating measures being taken to address the overspend and also how it presented information on those key service areas where demand and cost pressures were highest. It was also noted that the NJC pay award had now been agreed and that it was expected to be paid in the December payroll, at which time it would be reflected in financial dashboards.

Responding to a Member’s enquiry, it was confirmed that the Chancellor’s Autumn Budget statement did not impact upon the Council’s in-year financial position for 2024/25. It was noted that in terms of future years, it was expected that the Council would receive the provisional Local Government Finance Settlement on 19 December 2024. It was also reiterated to Members that the Council’s initial budget proposals for 2025/26 would be submitted to Executive Board in December.

Regarding the current financial year, the Board received an update on the demand pressures that continued to be felt both within Adults’ and Children’s services. An update was also provided on the ongoing actions being taken to mitigate such pressures and the impact that those actions were having. It was noted that a further update on such matters would be provided to the Board in December. 

In response to an enquiry, it was noted that the Council expected to be compensated for increased costs arising from the increase in employers’ National Insurance Contributions (NICs) for those employees directly funded by the Council. However, regarding any impact for the Council arising from the increase in employers’ NICs in terms of those services which were commissioned and delivered by a third party, it was noted that this was currently a fluid situation, and that the Council awaited the outcomes from the ongoing national discussions on such matters.

Responding to a further enquiry it was confirmed that there was no change to the estimated revenue budget gap for 2025/26 of £104m, as previously reported to the Board.

RESOLVED –

(a)  That it be noted that at September 2024 (Month 6 of the financial year) the Authority’s General Fund revenue budget is reporting an overspend of £22.9m for 2024/25 (3.7% of the approved net revenue budget) after application of reserves and within a challenging national context. That it also be noted that a range of actions are being undertaken to address this position as detailed within the submitted report;

(b)  That it be noted that at September 2024 (Month 6 of the financial year) the Authority’s Housing Revenue Account is reporting a balanced position;

(c)  That it be noted that at September 2024 (Month 6 of the financial year), the DSG budget is projecting an in-year pressure of £15.1m, which equates to 2.73% of the total estimated DSG funding;

(d)  That it be noted that known inflationary increases, including demand and demographic pressures in Social Care and known impacts of the rising cost of living have been incorporated into this reported financial position. It also be noted that the 2024/25 pay offer has now been agreed for both JNC and NJC staff, and that the JNC element was included in September’s payroll and is reflected in directorate dashboards. The Council expects to pay the NJC element in December’s payroll and these additional costs and associated mitigations will be shown in dashboards once payment is processed. That it also be noted that inflationary 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;

(e)  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;

(f)  That the delay in the go live date of the new MS Dynamics Finance System, be noted, with it also being noted that the Council continues to work to minimise additional costs and further delays, whilst ensuring sufficiently robust testing for effective implementation. It also be noted that an update is to be brought to Executive Board with the revised timescales.