Agenda item

An update on the Council’s 2023/24 forecast revenue budget position at the end of Quarter 3 2023/24 (31^st December 2023)

The Cabinet considered a report of the Director of Finance which provided Members with an update on the Council’s 2023/24 forecast revenue budget position (outlined at Annex 1 of the report) and the financial position of the capital programme, as at 31^st December 2023 (Quarter 3 – 2023/24), together with the revised capital programme 2023/24 to 2027/28, as outlined in section two of the report (outlined at Annex 2 of the report).

The forecast outturn position for 2023/24 was a projected adverse variance of £16.642m after allowing for approved and pending transfers to and from reserves. There were significant variances contained within the projected net overspend within three areas forecasting pressures:

a.    Children’s Services is forecasting a pressure of £14.240m.

b.    Place and Economic Growth is forecasting a pressure of £5.442m.

c.    Community Health and Adult Social Care is forecasting a pressure of £0.864m.

These will continue to be closely monitored for the remainder of the ensuing financial year with action taken to address variances and take mitigating action as detailed in the report. Favourable variances across the remaining portfolios totalling £3.903m are offsetting these pressures in these three areas.

An update on the major issues driving the projections is detailed within Annex 1, of the report.

The forecast pressure of £16.642m, at Quarter 3, was an increase of £0.449m on the adverse position of £16.194m reported at Month 8. Management actions that have been approved to review and challenge planned expenditure, control recruitment and to maximise income would hopefully have an impact on the anticipated the outturn deficit position.

Information on the Quarter 3 position of the Dedicated Schools Grant (DSG), Housing Revenue Account (HRA) and Collection Fund was also outlined in the report. As reported previously, the position on the DSG continues to improve and as at month 9 it was forecasting an in-year surplus of £2.117m, with an estimate that the year-end position will be a surplus of £3.561m.

Action would continue to be taken with the aim of mitigating cost pressures and delivering and maintaining a surplus position. To assist, Oldham was 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 were currently no significant issues of concern in relation to the HRA. The Collection Fund was forecasting an in-year surplus of £0.707m. 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.

The report also outlined the most up to date capital spending position for 2023/24 to 2028/29 for approved schemes. The revised capital programme budget for 2023/24 was £79.466m, at the close of month 9 (2023/24), a net decrease of £30.839m from the original budget of £110.305m. Actual expenditure to 31^st December 2023 was £52.765m (66.40% of the forecast outturn). It was thought likely that the forecast position would continue to change as the year drew to a close, with additional re-profiling into future years.

Options/alternatives considered:

a.    To consider the forecast revenue and capital positions presented in the report including proposed changes (preferred option).

b.    To propose alternative forecasts.

Resolved:

1.    That the Cabinet endorses the forecast revenue outturn for 2023/24, at Quarter 3 (2023/24) being a £16.642m adverse variance.

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

3.    That the Cabinet endorses the revised capital programme for 2023/24 and the forecast for the financial years to 2027/28 as at Quarter 3 (2023/24).