To consider the report of the Chief Officer Financial Services presenting the Council’s projected financial health position as at month 4 of the 2023/24 financial year.
The Chief Officer Financial Services submitted a report presenting the Council’s projected financial health position as at month 4 of the 2023/24 financial year in respect of both the General Fund revenue budget and the Housing Revenue Account.
In introducing the report, the Executive Member extended her thanks to the work that the Chief Officer Financial Services and her team continued to undertake in very challenging circumstances. The Board received an overview of the key points within the submitted report and noted the forecasted overspend of £33.9m on the Authority’s General Fund as at Month 4 of the financial year.
Responding to a Member’s comments and concerns around the level of projected overspend at this point in the financial year and how this linked to the budget setting process, the Board received further details and assurance regarding the timeframe for the budget setting process and its robustness, and the work which continued to monitor and mitigate the pressures faced, with clarification also being provided around the key messages which continued to be communicated across the Authority to support ongoing actions.
In addition, the Board specifically considered the challenges that continued to be faced around the delivery of services for Children Looked After, which reflected the position nationally. In considering this, Members specifically referenced increasing levels of demand and also the significant increase in costs for external placements. Responding to an enquiry, the Board received an update on the actions which continued to be taken in this area around mitigating the challenges faced, how Leeds was performing when considering the performance of other comparable Authorities and how such pressures were being monitored and responded to in terms of the budget setting process.
Further context was provided on a number of areas and processes which challenged the Council’s ability to take a medium term approach towards its budgetary process, with it being highlighted that these were areas where Local Government needed to continue to work with national Government, in order to make those planning processes easier.
(a) That it be noted that at Month 4 of the 2023/24 financial year the Authority’s General Fund revenue budget is forecasting an overspend of £33.9m for 2023/24 within a challenging national context, and that a range of actions are being undertaken, or are proposed to achieve a balanced budget position;
(b) That the virement of identified non-essential spend budgets out of respective Chief Officer budgets and into specific strategic cost centres within each directorate, be approved, as a measure to prevent further spend against these budgets where it has been identified that this spend is not required;
(c) That the release of £1.3m from the Strategic Contingency Reserve to fund budgeted fleet savings which are not deliverable across the Council in year due to the impact of inflation, costs of maintaining an ageing fleet and increased demand for services, be approved;
(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 2019;
(e) 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, including the employer’s 2023/24 NJC pay offer 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 Boards as more information becomes available. That it also be noted that proposals would need to be identified to absorb any additional pressures;
(f) That the Month 4 positions regarding the use of Invest to Save, Covid Backlog and Flexible Capital Receipt resources, be noted, with the additional planned use of £5.3m of Capital Receipts in 2023/24 also being noted which will support transformation projects and deliver savings in addition to the budgeted use;
(g) That it be noted that at Month 4, the Authority’s Housing Revenue Account is forecasting an overspend of £3.2m for 2023/24.