Agenda item

1.  That a virement from centrally held budgets to service directorates in respect of costs of the additional Employer contributions to the Local Government Pension Scheme, amounting to £0.7m be authorised.

2.  That a one-off virement from the Redundancy Reserve to Children’s Services in respect of redundancies arising from the review of Children’s Centres, amounting to £67k be authorised.

3.  That slippage of £25.8m in the General Fund capital programme to 2024/25 be authorised.

That it be noted that:

(a)  The Council’s forecast overspend at the end of Quarter 3 was £17.81m. Overall this represented a further increase from the £8.2m reported at the end of Quarter 2. The risk was therefore high that the Council would be unable to balance its budget within the Capitalisation Direction, unless it draws upon the Budget Smoothing Reserve, other reserves and provisions and continued to take action to reduce expenditure and increase income.

(b)  The accounting adjustments of £6.978m attributable to the Balance Sheet and ledger reviews, and that these would mitigate the headline forecast outturn, reducing it from £17.81m to £10.83m. At this stage, no virements were being recommended until the end of the financial year when further work is concluded.

(c)  Service revenue budgets were forecast to overspend by £21.3m in 2023/24. There were Corporate overspends in respect of interest costs and receipts (£2.3m) and the MRP of £3.2m. This was balanced by an underspend on the Corporate Contingency budget (£7.7m) and a number of other variances within the Corporate budget amounting to £1.3m. Service and Corporate budgets combined are showing an overspend of £17.81m prior to the recommended virement of £6.98m.

(d)  Medium Term Financial Strategy Savings (MTFS) of £21.2m are expected to be delivered in 2023/24 against planned savings of £22.4m.

(e)  That the Capital programme was forecast to underspend in 2023/24 by £29.1m. Of this, £25.8m was due to delayed starts on various projects slippage and it is one of the recommendations of this report that approval is granted to slip this to 2024/25.

The Lead Member for Finance, Council Assets, Procurement and Revenues & Benefits introduced a report that set out the forecast position of the Council for the financial year 2023/24 as at the end of the third quarter to 31^st December 2023.

The Council’s forecast overspend at the end of Quarter 3 was £17.8m, which was a further increase from the £8.2m reported at the end of Quarter 2.  The Cabinet noted the accounting adjustments of £6.978m attributable to the Balance Sheet and ledger reviews, and that these would mitigate the headline forecast outturn, reducing it from £17.8m to £10.8m.Service budgets were forecast to overspend by £21.3m in 2023/24.  Medium Term Financial Strategy savings of £21.2m were expected to be delivered against planned savings of £22.4m.  The capital programme was forecast to underspend in 2023/24 by £29.1m, primarily due to late starts on various projects and it was proposed and agreed that approval be given to slip this to 2024/25.

The Lead Member commented that it had been a challenging year in delivering a budget that had been set by the previous administration that he believed had contained inadequate provision for services such as adult social care and temporary accommodation.  These were among the areas reporting significant overspends and the Cabinet was seeking to manage the in-year pressure and address the issues by ‘rightsizing’ the budgets for 2024/25 and beyond.  The measures being taken to mitigate the in-year overspends were summarised and robust financial controls had been put in place.

The Cabinet was asked to note the position as at the end of the third quarter and approve virements and the slippage to the capital programme.  The recommendations were agreed.

Resolved –

(a)  That a virement from centrally held budgets to service directorates in respect of costs of the additional Employer contributions to the Local Government Pension Scheme, amounting to £0.7m be authorised.

(b)  That a one-off virement from the Redundancy Reserve to Children’s Services in respect of redundancies arising from the review of Children’s Centres, amounting to £67k be authorised.

(c)  That slippage of £25.8m in the General Fund capital programme to 2024/25 be authorised.

(d)  That it be noted that:

  i.  The Council’s forecast overspend at the end of Quarter 3 was £17.81m. Overall this represented a further increase from the £8.2m reported at the end of Quarter 2. The risk was therefore high that the Council would be unable to balance its budget within the Capitalisation Direction, unless it draws upon the Budget Smoothing Reserve, other reserves and provisions and continued to take action to reduce expenditure and increase income.

  ii.  The accounting adjustments of £6.978m attributable to the Balance Sheet and ledger reviews, and that these would mitigate the headline forecast outturn, reducing it from £17.81m to £10.83m. At this stage, no virements were being recommended until the end of the financial year when further work was concluded.

  iii.  Service revenue budgets were forecast to overspend by £21.3m in 2023/24. There were Corporate overspends in respect of interest costs and receipts (£2.3m) and the MRP of £3.2m. This was balanced by an underspend on the Corporate Contingency budget (£7.7m) and a number of other variances within the Corporate budget amounting to £1.3m. Service and Corporate budgets combined are showing an overspend of £17.81m prior to the recommended virement of £6.98m.

  iv.  Medium Term Financial Strategy Savings (MTFS) of £21.2m were expected to be delivered in 2023/24 against planned savings of £22.4m.

  v.  That the Capital programme was forecast to underspend in 2023/24 by £29.1m. Of this, £25.8m was due to delayed starts on various projects slippage and it was one of the recommendations of the report that approval was granted to slip this to 2024/25.