The Chief Officer Financial Services submitted a report presenting the Council’s financial performance against the 2024/25 revenue budget, as at month 4 of the financial year. The report also provided an update on the month 4 position in respect of the Housing Revenue Account (HRA), the Dedicated Schools’ Grant (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 4 of the financial year, the Council was forecasting a General Fund overspend of £22.2m. 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.
The scale of the challenge being faced in terms of addressing the General Fund budget gap, as discussed under the previous report on the Medium Term Financial Strategy was reiterated, with it being highlighted that nationally Local Authorities continued to experience similar challenges.
In considering this matter, the Board acknowledged that a number of matters linked to the information within this report had already been discussed as part of the previous agenda item on the Medium Term Financial Strategy.
RESOLVED –
(a) That it be noted that at July 2024 (Month 4 of the financial year), the Authority’s General Fund revenue budget is reporting an overspend of £22.2m for 2024/25 (3.6% of the approved net revenue budget) after the application of reserves and within a challenging national context. That it also be noted that a range of actions are being taken to address the position as detailed within the submitted report;
(b) That it be noted that at July 2024 (Month 4 of the financial year) 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 and known impacts of the rising cost of living have been incorporated into the reported financial position. The position assumes a pay settlement of 3.5%, with the final pay award for 2024/25 yet to be agreed. 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 2024 through the annual Revenue Budget report;
(e) That it be noted that the reported position reflects that the budgeted contribution to the General Reserve of £3m will be reduced to £1.5m and that the budgeted contribution of £3m to the Strategic Resilience Reserve will not be made in 2024/25, with it also being noted that these planned contributions have been applied to the in-year position to reduce the overspend due to the significant financial pressures that the Council is facing. That it also be noted that provision is made in the Medium Term Financial Strategy for a base budget contribution of £3m to each reserve from 2026/27.