Agenda item

To review the Quarter Two budget monitoring forecast for revenue for the financial year 2024/25. Considered by Cabinet on 19 November 2024.

The Chairman noted that on page 21 of the agenda pack, was a report setting out the second quarterly revenue budget monitoring forecast for the financial year 2024-25 based on the position at the end of September 2024. It also provided an update on the known pressures that would likely impact the future years budgets and MTFS as well as an updated assessment of changes to assumption that affected the 2025/26 budget and the budget gap in future years.

The report was considered by Financial Planning Task Group on 15th November and Cabinet on 19th November. A summary of the Task Group’s discussions on the report was provided at page 206 of the agenda pack.

Cllr Nick Botterill, Cabinet Member for Finance, Development Control and Strategic Planning introduced the report and noted that the Q2 report forecasted a better position than the report for Q1, with there now being a projected net overspend for the year of £0.861m compared to £8.284m previously. It was also suggested that there was confidence that by the end of the year, a balanced figure would be reported and that efforts were taking place to bring spending into line with this. Further attention was also brought to the People Services area, which still experienced continued pressure and that mitigations would continue to be implemented.

Cllr Pip Ridout, Chair of Financial Planning Task Group (FPTG), stated that a report had been submitted by the FPTG to Cabinet with attention drawn to the predicted variance at the year-end in Adult Social Services which was primarily offset by Place. Additionally, the knock-on effects of minimum wage and National Insurance would need to be considered when setting the future budget.

Members of the Committee discussed the report and made the following comments, which included, but were not limited to regarding the £1.2million forecasted overspend on the Housing Revenue Account, with it suggested that this increase was due to the price increases services being provided for and that it was important to understand these costs and build them into the business model. Detail was also provided on the contract failure affecting void rates, to which it was stated that the void rate was being reduced to a near normal level with completed voids now being with in-house teams in order to mitigate the risk with external contractors.

A discussion took place regarding the overspend in the Adult Social Care spend, with it suggested that the Place budget and savings should not remain to subsidise the overspend. It was also suggested that there was a need for officers and directors to be held account for the overspend. In response, it was suggested that Wiltshire Council was spending less than other local authorities on Adult Social Care, with 62% of the budget allocated and that such overspends were dealt with by a One Council approach. It was outlined that Directors were responsible for their own budgets and service delivery and that if savings could not be delivered these would have to be replaced by savings by other services. It was also stated that recurring meetings were taking place on a fortnightly basis to discuss the Adult Services spend. Members raised further points regarding how the Adult Services spend was for statutory services and therefore such spending was necessary in order to be legally compliant.

Lizzie Watkin, Corporate Director for Resources, Section 151 Officer, provided further clarity on comments made within the report regarding the need for permanent solutions in order to ensure that the Council remained financially stable, with it suggested that it was not sensible to have one-off mitigations as this might cause underlying pressure to follow into subsequent years. The need to be prepared for additional costs caused by National Insurance and National Living Wage was also stressed as well as clarity regarding the Dedicated Schools Grant and how the negative trajectory of the grant would affect the Council as well as the risks faced.

At the conclusion of discussion, it was,

Resolved:

The Overview and Scrutiny Management Committee agreed to note:

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

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

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

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

e)    The comments of the Financial Planning Task Group.