Agenda item

To receive a report from the Chief Executive and Deputy Chief Executive.

Cllr Nick Botterill, Cabinet Member for Finance, Development Management, and Strategic Planning, presented a report which provided details of the revenue budget monitoring forecast for the second quarter of the financial year 2023/24, based on the position at the end of September 2023. It also provided an update on the Medium-Term Financial Strategy (MTFS)
and budget gap for the financial year 2024/25 and beyond.

It was stated that there was a current projection of an underspend of around £0.402m, and that whilst there remained risks and challenges including around achieving savings, the council was currently in a positive financial position at the midpoint of the year.

However, it was also noted that there were increases in the cost of individual care packages adding financial pressure, and that whilst core inflation nationally was decreasing it was anticipated that these and similar areas would continue to see high inflationary rates. The continuing high deficit in relation to the Dedicated Schools Grant (DSG) was discussed, with the potential to join the Safety Valve programme which would eliminate the current deficit, but noting measures were needed to prevent recurrence.

The Leader commended the approach taken to deliver the sound financial position the council was in, and that Cabinet would not be complacent noting inflation still exceeded the ability to raise income and other pressures, and emphasised the importance of preventative measures within the Business Plan to both reduce costs and positively impact people and services.

Cllr Pip Ridout, Chairman of the Financial Planning Task Group, stated it was quite rare to have a net underspend for the second quarter and the general position was good, though with some major risks which could impact that position quite rapidly. Councillor Graham Wright confirmed the Overview and Scrutiny Management Committee would be discussing the report at its next meeting.

Councillor Gordon King welcomed the report and its encouraging position but the importance of monitoring ongoing risks, such as the level of reserves.

Councillor Ian Thorn asked if it was projected that the pressures within People services would increase in later quarters and sought more details on the Dedicated Schools Grant.

In response it was stated that small numbers of care packages could have big impacts on the finances, and the council was taking a cautious approach on projections. In relation to the DSG further details were provided on the Safety Valve programme intended to address the current deficit, with a Cabinet decision required to enter into the programme. Discussions were ongoing, and it was noted that costs had increased significantly due to requirements and events beyond the council’s control, with central government accounting counting it against council budgets nonetheless, and preventing a recurrence of deficit would be very challenging.

At the conclusion of discussion, it was then,

Resolved:

Cabinet approved

a)    the transfer of Education and Skills reserves totalling £0.160m to reflect the estimated usage in year, these relate to grant funded schemes which straddle more than one financial year;?

b)    the transfer of Families and Childrens programmes of pastoral support reserve of £0.524m to fund scheduled activity this financial year;?

c)    The transfer of the anticipated deficit on the DSG reserve of £18.583m reflecting the planned use of this reserve for this financial year;?

d)    The transfer of £1.661m from the Transformation Reserve to reflect the?
planned usage in year.?
?

Cabinet Noted

a)    the current revenue budget is forecast to underspend by £0.402m by the end of the financial year;?

b)    the current forecast savings delivery performance for the year?.

Reasons for Decision

To inform effective decision making and ensure sound financial management as part of the Councils overall control environment.

To inform Cabinet on the forecast revenue financial position of the Council for the financial year 2023/24 as at quarter two (30 September 2023), including delivery of approved savings for the year.