Agenda item

To receive the Financial Year 2023/2024 - Quarter Two Revenue Budget Monitoring report of the Chief Executive, considered by Cabinet on 14 November 2023 as well as a report from the Financial Planning Task Group, following its meeting on 10 November 2023.

The Chairman noted that in the agenda was a report which set out the second quarterly revenue budget monitoring forecast for the financial year 2023/24 based on the position at the end of September 2023. It also provides an update on the Medium Term Financial Strategy (MTFS) and budget gap for the financial year 2024/25 and beyond. It was noted that the report had been considered by Financial Planning Task Group on 10^th November and Cabinet on 14^th September. A summary of the Task Group’s discussions was provided in a report in the Agenda Supplement.

Cllr Nick Botterill, Cabinet Member for Finance, Development Control and Strategic Planning stated that with the net budget of £469m, at the halfway stage there was a projected underspend of £400,000, which provided a favourable shift from the Quarter One forecast. The Cabinet member drew attention to overspends within the families and children area, with it noted that though the number of children presenting themselves was stable, there had been an increase in cost pressures relating to care packages due to inflation. These overspends had however been offset by the corporate side, which was benefitting from a strong balance sheet.

Further reference and concern was raised towards inflation, with it stated that it was not believed that these cost pressures would retreat. In addition, reference was drawn to how a number of people presenting themselves could cause a shift in position.  In summary, the Cabinet Member expressed that comfort and pride could be taken from the Quarter Two position.

The Chairman welcomed Lizzie Watkin in her role as Section 151 Officer and Andy Brown as Deputy Chief Executive, who made the following comments that there was a risk associated with the dedicated schools grant and an increasing deficit within this area. In addition, Wiltshire Council was in negotiations to be part of the Safety Valve Programme and that risk had been flagged associated with this work with significant support required to be implemented.

Cllr Pip Ridout, Chair of the Financial Planning Task Group (FPTG) invited the Chairmen and Vice-Chairmen of Select Committees to investigate over and underspends within their respective areas. In addition, Cllr Ridout warned that apart from any complacency, the figures were in a good place for the half year stage with no severe problems.

The following comments were received by Members of the Committee, including that regarding the Safety Valve Scheme there was set to be a special Childrens Select Committee meeting on 7 December 2023 to scrutinise the bidding process as part of a Department for Education requirement, with all Members welcome.

Clarity was sought regarding the Dedicated Schools Grant with questions placed regarding how it was possible for a deficit on a reserve to arise, to which it was clarified that when assessing children who present needs, the cost is more than is allocated through the Grant and therefore a deficit occurs. This happens across the county and the government have recognised this and therefore provide a statutory override and once this override comes off it will hit balance sheets and offset positive reserves and would have to be funded. It was also noted that this override would end in March 2026 but could potentially be extended with negotiations about how the deficit could be brought back into balance.

A further question was asked regarding the transfer of reserves and what would happen to the projected £400,000 underspend if such transfers did not happen, to which it was clarified that the reality would be that the Council would be in an overspend position, however some of the funding received in grant form such as for families and children straddle multiple years. There was also an agreement with Transformation programmes across the Council to prioritise. It was also clarified that if not spent, funding for children would have to be returned, therefore it was critical for the Council to do as much as it can.

Reference was drawn to the way in which data is presented, including variants to which it was noted by officers that to be transparent that reserve movements are shown, with it noted that some activities would not happen without reserves set aside. Clarity was also provided that information had been included within the capital report relating to savings from reduction, which had been requested at the last meeting.

Reference was drawn to an overspend in children’s services where there had been an overspend with the cost for each person in care higher than the budgeted cost, to which officers noted that the forecast included additional activity to address overspend such as moving people into more cost-efficient placements and the use of early intervention work to keep children out of this service. A point was raised regarding the report having broad headlines, to which officers noted that Table One of Page 22 provided an insight into which areas were seeing levels of pressure.

A point was made about savings made through staff vacancies, to which officers stated that recently the Council had transferred to the new Oracle system, which would have additional functionality and eventually in the next financial year would be able to provide data which would enable officers to look at the impact of vacancies and retention.

At the conclusion of discussion, it was,

Resolved:

The Overview and Scrutiny Management Committee agreed to note:

1.    The current revenue budget is forecast to underspend by £0.402m by the end of the financial year;

2.    The current forecast savings delivery performance for the year;

3.    The report of the Financial Planning Task Group.