Agenda item

To receive and discuss the Revenue Monitor and Capital Investment Programme 2023/24 Quarter 1 – June 2023.

The Committee received a report submitted by The Director of Finance which provided the Audit Committee with the opportunity to review the first budget monitoring report for the financial year 2023/24. It was therefore able to consider the key information relating to the forecast revenue budget position and the financial position of the capital programme at 30 June 2023 (Quarter 1), together with the revised capital programme covering the period 2023/24 to 2027/28. The report was presented to and approved at the Cabinet meeting of 21 August 2023.

The report presented the current forecast revenue outturn position for 2023/24 at Quarter 1 together with the forecast outturn for the Dedicated Schools Grant (DSG), Housing Revenue Account (HRA) and Collection Fund. The report also outlined the most up to date capital spending forecasts for 2023/24 to 2027/28 for approved schemes. As the financial monitoring report reflected the financial position at Quarter 1, it could be regarded as an early warning of the potential year-end position if no further action is taken to reduce net expenditure where possible. The management action initiated in 2022/23 across all service areas to review and challenge planned expenditure and to maximise income has had to be continued in 2023/24. Although, the impact of this action has yet to take full effect in the current financial year, it is anticipated that by the year end, the current outturn deficit position should be reduced. This should start to be demonstrated in the update reports which are to be presented to Cabinet, the Governance, Strategy and Resources Scrutiny Board and this Committee at months 6, 8 and 9.

The Director of Finance drew attention to the potential for a £12.1 million overspend unless remedial action is taken to reduce that figure. There are three areas of overspending which are:

• Community Health and Adult Social Care

There are variances in learning disability and community care budgets which are forecast to overspend.

• Children’s Services

Children’s Social Care is the primary area of concern with the areas that overspent in 2022/23, continuing to do so in 2023/24.  The budget process for this financial year included  significant investment into Children’s Social Care and the variance is additional to that investment. This adverse variance has been caused by a range of factors. one of which is the number of children requiring social care resulting in expensive placements.

• Place and Economic Growth

This area is also projecting an overspend.

In response to a Member’s question regarding a timeline for new Council owned children’s placement units, the Director of Finance advised that she would provide that information to the Member following the meeting.

The Director of Finance informed the Committee that the   underspend figures shown in paragraph 3.6.2 of Appendix 1 report should reflect Total Forecast Net Expenditure variance figure in the table in paragraph 3.6.1.

In response to a query relating to £6.1million to cover the pay award, the Director of Finance informed the Committee that this amount will cover most of  the current pay offer. If, however, the award is greater than the current offer additional funding will need to be found from reserves.

Regarding central government funding for Adult and Children’s Services, the Director of Finance informed Members that the Government provides a general unringfenced grant (the Social Care Grant) which is expected to be spent on Adult and Children’s Social Care.  There are also ringfenced grants to support Adult Social Care services. A new grant has just been notified for 2023/24 (the Market Sustainability and Improvement Fund) and this is not yet included in the financial forecasts.  This new grant funding stream will also continue in 2024/25.

The Council can also raise a 2% Adult Social Care precept and income generated by the Precept must be used for Adult Social Care.

There is no specific grant stream for Children’s Social Care services.

It is expected that the Government will provide  additional funding for Adult Social Care winter pressures but the value of such funding  will not be known until the early winter months.

With regard to the Environmental Services Directorate there is a projected overspend of £0.451m. The Economy Directorate area is projecting an overspend of £3.102m and the biggest pressures are repairs and maintenance in the corporate estate and costs  for the Strategic Housing service, mainly linked to temporary accommodation due to the increase in the number of individuals classed as requiring urgent accommodation.

The Director of Finance informed the Committee that the Dedicated Schools Grant is in a good financial position and is showing a projected surplus. The Housing Revenue Account is also forecast to continue to be  in  a surplus position overall although there is a planned deficit in year. The Collection Fund is showing an overall projected surplus.

The Director of Finance assured the Committee that management is constantly looking of ways to address the projected overspending in services  to reduce the overall corporate variance.

With regard to the current Capital Programme this showed total expenditure and funding of £332.024m over the period 2023/24 to 2027/28  (£103.748m in 2023/24) based on the best current information available. It is expected that the month 6 position will show some movement on that forecast.

Resolved: that the following be noted: The  -

(1)       Forecast revenue outturn for 2023/24 at Quarter 1 being a £12.104m adverse variance and action being taken to manage expenditure;

(2)       Forecast positions for the Dedicated Schools Grant, Housing Revenue Account and Collection Fund; and

(3)       Revised capital programme for 2023/24 and the forecast for the financial years to 2027/28 as at Quarter 1.