Agenda item

Report to follow.

The Committee considered a report which was attached to the Supplementary Information Sheet and which summarised the projected outturn position for the Council’s General Fund (GF) revenue account and Housing Revenue Account, based on the latest actual and accrued financial data.

The Original Budget approved at Council in February 2023 had included a budget gap of £3.1 million.  A revised budget had been presented to the Committee in July with a reduced budget gap of £1.6 million, following review of budgets with services.  Further work had been undertaken, since July, jointly by the Corporate Management Board (CMB), finance and services to close this gap and savings had been made to reduce this ensuring that the Revised Budget was balanced.  Several areas had been identified as a financial risk to the Council.  Budgets had been increased to reflect this and were listed in the report.  The month 4 forecast included these budget changes.

The revised budget had been adjusted to reflect the changes and officers were projecting an overspend within services on the General Fund revenue account of £0.676 million which was offset by transfers from reserves and corporate adjustments to give a forecast surplus of £0.331 million.  The Committee noted that any surpluses or deficits would impact on reserves at year end.

The CMB was implementing measures to address the budget gap in 2023-24 through a “Financial Recovery Plan” and the initial actions had been set out in the budget report considered by Council at its extraordinary meeting held on 30 August 2023.  Some of those measures would be one-off, in-year adjustments which would not help the budget in 2024/25 and future years.  This would be prioritised in the mid-year review of the Medium-Term Financial Plan to be reported in November 2023.

The report noted that officers were projecting an overspend on the HRA of £1.966 million and had set out the detail behind this variance.

Progress against the capital programme was underway and the Council expected to spend £124.4 million on its capital schemes by the end of the financial year against a budgeted expenditure of £196.8 million.

The Lead Councillor for Finance & Property apologised to the Committee for the lateness of publication of the report, but emphasised the importance of ensuring that the Committee had an opportunity of commenting on it prior to the full Council meeting in October.   The Lead Councillor acknowledged the huge level of effort that had been put in towards achieving the budget savings, but noted that this was only the first step in the process towards financial stability. 

During the debate, the Committee made the following comments:

·      Assurance was sought that the processes in place for monitoring future expenditure were sufficiently robust as the setting of next year’s budget was less than six months away. Officers commented that revenue accounts and capital accounts, and the balance sheet would be robustly monitored going forward.

·      In relation to the variance of £58.3 million on the capital programme for 2023-24, there was a query as to whether there were any key risks of which the Committee should be aware, which might impact on that variance. For example, risks associated with loss of grant funding.  It was suggested, and officers agreed, that bearing in mind the amber and red status of the Ash Road Bridge and Weyside Urban Village projects respectively, the amounts of the grants involved should be quantified in future reports.

·      Noting that over a quarter of a million pounds had been saved in respect of climate change/sustainability, assurance was sought that climate change action was still a priority for the Council.

·      Concern that some of the savings identified were speculative, and the savings identified in treasury management costs seemed to contradict the comments of the external auditor in their value for money letter. 

·      In response to a request for additional information to provide evidence of the claimed savings identified in the report, the Strategic Director: Transformation and Governance indicated that he would take this up with the Interim Chief Finance Officer to see how this additional information could be provided.

·      Provision of information on key variances by directorate was welcomed.

·      Given the issues with finalising the audit of accounts, query as to the outstanding risk associated with potential inaccuracies in the opening position and, conversely, in terms of in-year reporting, given the finance team resource constraints. In response, officers confirmed that the information in the report was as accurate as it could possibly be.

·      Request for an update on the year end reserves forecast.

·      Concern that the Council was able to commit the necessary resources in order to meet its legal requirements around Air Quality Management Areas both in the town centre and in Shalford.

·      In relation to the £168,000 saving associated with the reduction in the amount of Minimum Revenue Provision (MRP) required due to application of correct treatment of assets, query as to what was the incorrect treatment of assets. Officers confirmed that treatment of MRP was about assets under construction, and that the guidance on how the rules were applied had been interpreted in a slightly different way following CIPFA guidance.

·       In response to what had changed since the former Section 151 Officer had advised that no reserve should be used this year, yet reserves were stated in the balance sheet, it was noted that certain reserves were allocated or earmarked for specific purposes.

·      In response to a request for clarification in respect of the £390,934 savings from salary adjustments for in-year vacancies, noting that there had been no recruitment freeze impact at this stage, the Strategic Director commented that a recruitment freeze had been introduced in respect of non-essential posts as part of the financial recovery plan approved by the Council at the end of July. The £390,934 savings related to unfilled vacancies through the course of the year.

Having considered the report, the Committee

RESOLVED:That the Council’s latest financial monitoring for the financial year 2023-24 be noted and that the comments and observations made during the debate be passed to the Executive.

Reason:

To ensure that Councillors and officers fulfil their responsibilities for the overall financial management of the Council’s resources.

(In accordance with Council Procedure Rule 19 (e), Councillor Bob Hughes requested that his abstention be recorded in the minutes.)