Agenda item

Topresent anupdate onthe Council’s 2023/24forecast revenue budgetposition and the financial position of the capital programme as at 30th November 2023 (Month 8), together with the revised capital programme 2023/24 to 2027/28.  This includesthe MinimumRevenue ProvisionPolicy Statement and Prudential Indicators

Introductory Statement

The Cabinet Member for Finance and Corporate Resources made an introductory statement setting out the background and context for pressures faced in the current year and developing the budget for 2024. It had been an extremely challenging year with the Council facing an overspend of £16m. Particular pressures had resulted from Government policies, austerity, cost of living and benefit changes.

2024/25 would be the sixth year that the Government had made a one year final settlement making long term planning challenging. The Government had recently announced that a £500 million fund would be available for children’s’ services and social care but it was unclear what the authorities share would be or when it would be available. The Household Support Grant and Council tax Support Grant would end in March and no announcement had been made as to what funding would then be available.

In order to produce a balanced budget for 2024/2025 it was necessary to achieve savings of £22.8 m.  In putting forward proposals for cuts in services, increases in Council Tax, the uses of Reserves and increases in service charges the Administration was putting forward a balanced and robust budget

Report

Consideration was given to a report of the Director of Finance an update on the Council’s 2023/24 forecast revenue budget position at Annex 1 and the financial position of the capital programme as at 30 November 2023 (Month 8) together with the revised capital programme 2023/24 to 2027/28, as outlined in section two of the report at Annex 2.

The Cabinet Member for Finance and Corporate Resources and the Director of Finance presented the report and addressed enquiries of the Committee.

With regard to the Revenue position, The forecast outturn position for 2023/24 is a projected adverse variance of £16.194m after allowing for approved and pending transfers to and from reserves. There are significant variances contained within the projected net overspend within three areas forecasting pressures: Children’s Services a pressure of £13.386m; Place and Economic Growth a pressure of £5.312m; and Community Health and Adult Social Care a pressure of £0.815m. The report set out action taken to address variances and take mitigating action. Favourable variances across the remaining portfolios totalling £3.318m are offsetting these pressures in these three areas.

The forecast pressure of £16.194m at Month 8 is an increase of £1.605m on the adverse position of £14.589m reported at quarter 2. Management actions that have been approved to review and challenge planned expenditure, control recruitment and to maximise income was hoped to have an impact on the anticipated outturn deficit position.

Information on the Month 8 position of the Dedicated Schools Grant (DSG), Housing Revenue Account (HRA) and Collection Fund was also outlined in the report. As previously reported, the position on the DSG continues to improve and as at month 8 it is forecasting an in-year surplus of £2.117m, with an estimate that the year-end position would be a surplus of £3.561m. Action will continue to be taken with the aim of mitigating cost pressures and delivering and maintaining a surplus position. To assist, Oldham is taking part in the Department for Education sponsored Delivering Better Value in SEND (Special Educational Needs and Disabilities) which will provide dedicated support for the SEND Review reforms to 55 Local Authorities with historical DSG deficit issues with the aim of putting the DSG of participating Authorities on a more financially sustainable footing There are currently no significant issues of concern in relation to the HRA. The Collection Fund is forecasting an in-year surplus of £0.805m. The Collection Fund is particularly volatile, whilst currently in surplus the position will continue to be closely monitored throughout the year as any surplus or deficit at the end of the financial year will have a direct budgetary impact in 2024/25.

In Relation to the Capital Budget the report outlines 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 is £78.633m at the close of month 8, a net decrease of £31.672m from the original budget of £110.305m. Actual expenditure to 30 November 2023 was £46.267m (58.84% of the forecast outturn). It is likely that the forecast position will continue to change as the year draws to a close with additional re-profiling into future years.

RESOLVED: that the Report be accepted and commended to Cabinet

1. Forecast revenue outturn for 2023/24 at Month 8 being a £16.194m adverse variance having regard to the 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 Month 8.