Agenda item

Financial Year 2024/25 - Quarter Two Revenue Budget Monitoring

To receive the report of the Chief Executive and Director – Finance and Procurement (S151 Officer).

Decision:

Resolved:

Cabinet approves:

a) A new reserve for £0.680m is requested to facilitate early support and adviser activity for schools and families in future years.

Cabinet notes:

b) the current revenue budget is forecast to overspend by £0.861m by the end of the financial year.

c) the current forecast savings delivery performance for the year.

d) the forecast overspend on the HRA of £1.042m and the impact on the HRA reserve.

e) The forecast overspend against Dedicated Schools Grant (DSG) budgets of £14.942m and the impact on the cumulative DSG deficit.

f) The transfer from earmarked reserves;

i. £0.121m from the Leisure reserve to fund Virtual Studios

ii. £0.075m from Libraries reserve to fund Library pods and new windows

iii. £0.050m for Q2 Enforcement Activity from the Business Plan Priority reserve

iv. The use of £0.300m of earmarked reserves to enable Adults and Children’s Services to undertake a feasibility study of potential sites for accommodation

Reason 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 2024/25 as at quarter two (30 September 2024), including delivery of approved savings for the year

Minutes:

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

Cllr Botterill reported a net overspend for the year of £0.861m, a significant improvement from the previous £8.284m reported in the previous quarter. He noted that the position would need continued focus to ensure mitigation action delivered the required result for the rest of the year, and he had a high level of confidence that a balanced budget would be achieved.

The Leader noted the latest budget position and additional pressures such as an increase in minimum wage and employer National Insurance contributions and welcomed the ongoing action to achieve a balanced budget.

Cllr Graham Wright, Chairman of the Overview and Scrutiny Management Committee reported that the Committee would be considering the report in detail at their meeting on 27 November 2024. He also reported that the Financial Planning Task group met to consider the report on 15 November 2024 and considered issues relating to reducing the projected overspend, managing risk, Public Health budget, SEND transport and children in care. He indicated that the Task Group will suggest some areas that select committees might want to investigate further.

Cllr Gavin Grant, Vice-Chairman of the Financial Planning Task Group, confirmed that the Task Group met on 15 November to consider the report. He thanked Cllr Botterill and officers for attending the meeting and providing clarification on a number of matters raised by the Task Group. He referred specifically to the pressures the Council may face on the Safety Valve agreement and the impact of the Dedicated Schools Grant (DSG) deficit. He noted the need for an action plan to be in place to bring this back into a balanced budget.

The Leader reported that the new Government has recognised the issues in the DSG and had been heavily lobbied by the County Council Network. Additional funding has been made available for the SEN budget and there was an appetite to reform SEN although this would be a difficult process. He acknowledged that the figures in the Safety Valve agreement were challenging, and highlighted work was ongoing in relation to EHCP’s and this area required further support. Cllr Laura Mayes, Deputy Leader reported that the EHCP assessment process is reviewed regularly and the key element for schools is inclusion, which more and more schools are embracing, especially as this will be included as part of future Ofsted judgements.

Cllr Ian Thorn welcomed the reduction in net overspend for the year to £0.861m and congratulated Cllr Botterill and officers for their input in achieving this figure for current quarter. He commented on the Adult Services budget forecast overspend of £6.299m and asked about the mitigations in place. The Leader reported that Council’s generally had experienced significant pressures in the adult and children’s services budgets due to the complexities of the market the need for reform and consistency of care required, these issues were not as severe in Wiltshire as other Council areas. Cllr Botterill noted the cost pressure and felt that it could be managed within the overall budget for Adult Services. Officers gave detail about the mitigation in place to cover the overspend and explained that officers continue to work incredibly hard to make sure the needs of the vulnerable are met.

Cllr Thorn also commented on the (i) DSG Block summary which detailed the overall deficit of £14.942m, (ii) the Public Health Grant of £19.011m and the impact on services provided if it was reduced; and (iii) the impact of increased employers National Insurance contributions. Officers explained that the DSG Block deficit of £14.942m was part of the £66.233m balance carried forward for 2024/25 as detailed in table 13 of the report; The Leader reported that there was currently a Public Health reserve of £4.581m available and this would be drawn on if there was a reduction in grant, however he felt that a reduction in grant was unlikely; Cllr Botterill reported that the Government had informed Councils that they would be compensated in full for the impact of increases in employers National Insurance increases. The Leader highlighted his concern for Town and Parish Councils as the increase could have a major impact on their finances.

Cllr Adrian Foster asked for clarity in relation to Stone circle losses as the are not reported in the Council financial reports to Cabinet and the current financial figures would not be available until December 2024. The Leader noted the comments and reported that the finances of Stone Circle would be considered at the next Cabinet Shareholders Group meeting on 3 December 2024