Agenda item

A report providing an update as at 30^th September 2023 of the Council’s 2023/24 forecast revenue budget position and the financial position of the capital programme, together with the revised capital programme 2023/24 to 2027/28.

The Cabinet considered a report of the Director of Finance which provided Members with an update as of 30^th September 2023 (end of Quarter 2) of the Council’s 2023/24 forecast revenue budget position (detailed at Annex 1) and the financial position of the capital programme together with the revised capital programme 2023/24 to 2027/28 (at Annex 2), as outlined in section two of the report.

In terms of the Council’s revenue position, Cabinet was advised that the forecast outturn position for 2023/24 was a projected deficit variance of £14.588m after allowing for approved and pending transfers to and from reserves. Unlike 2022/23, when £12.000m of corporate resources were held to offset costs arising from the legacy of the COVID-19 pandemic, the budget for 2023/24 had been prepared so that anticipated COVID-19 legacy costs were consolidated within the mainstream budgets of Children’s Social Care and Community Health and Adult Social Care.

It was of concern that the overall financial position had worsened between quarters 1 and 2 (2023/24). In view of the projected adverse variance, it was considered important to ensure that measures were taken to address the overspending, namely: management actions across all service areas to review and challenge planned expenditure and to maximise income; to establish processes to monitor the recruitment of staff to vacant posts and significant items of expenditure; and ensuring that non-essential expenditure was minimised.

Information on the Quarter 2 position of the Dedicated Schools Grant (DSG), Housing Revenue Account (HRA) and Collection Fund was also outlined in the report. The 2022/23 DSG outturn was a cumulative surplus of £0.899m; the first time that a surplus has been reported since 2016/17, representing the achievement of a major financial milestone for the Council. Future projections continue to improve with forecast surpluses of £3.193m and £4.025m in 2023/24 and 2024/25 respectively. Action was to continue to be taken with the aim of mitigating cost pressures and delivering and maintaining the surplus position. There were currently no significant issues of concern in relation to the HRA.

The Collection Fund was forecasting a surplus with the Council’s proportion of this surplus being £1.054m. The Collection Fund was a particularly volatile area to forecast with many variables, including the impact of Government Business Rate reliefs, therefore, this area was to be closely monitored over the remaining months of 2023/24. Information would likely be available later in 2023/24 to determine if/how a surplus or deficit on the Collection Fund would impact on the 2024/25 Council budget.

In terms of the Capital Position, the submitted report outlined the most up to date capital spending position for 2023/24 to 2027/28 for approved schemes. The revised capital programme budget for 2023/24 was £76.595m, a net decrease of £27.153m from the £103.748m reported at the close of Quarter 1 (30^th June 2023) and a net decrease of £33.710m from the original budget approved at Council on 1^st March 2023 of £110.305m. The actual expenditure to 30^th September 2023 was £33.700m (44.0% of the forecast outturn). It was likely that the forecast position would continue to change throughout the year with additional re-profiling into future years.

Options/Alternatives considered:

1.    To consider the forecast revenue and capital positions presented in the report including proposed changes.

2.    To propose alternative forecasts.

Resolved:

That Cabinet approves:

1.    The forecast revenue outturn for 2023/24 at Quarter 2 being a £14.588m adverse variance and action being taken to manage expenditure.

2.    The forecast positions for the Dedicated Schools Grant, Housing Revenue Account and Collection Fund.

3.    The revised capital programme for 2023/24 and the forecast for the financial years to 2027/28 as at Quarter 2.