Agenda item

The purpose of this report is to appraise the Policy & Finance Committee of the Committee’s forecast General Fund Revenue, Capital and Housing Revenue outturn against the 2024/25 budget as approved by Council on 21 February 2024.

The Group Head of Finance and Section 151 Officer introduced his Budget Monitoring Report covering Quarter 2 for the financial year 2024/25 and the period up to 30 September 2024, appraising the Committee of the Council’s consolidated General Fund Revenue, Capital and Housing Revenue Account forecast against the 2024/25 budgets approved by Council on 21 February 2024.  The Committee was being asked to consider the report and provide Officers with any comments.

The first part of the report presented the Quarter 2 forecast for the financial year 2024/25 and included a consolidated Revenue Budget summary; Housing Revenue Account (HRA) summary; and Consolidated Capital Programme summary. The Committee’s financial report as of 30 September 2024 for the Quarter 2 period had been attached to the report at Appendix 1.

The following highlights were reported:

·       The anticipated contribution from reserves was forecast lower than budget by £165k in the current financial year, however, Councillors were reminded that it would still be necessary to draw down £3.4m from reserves.

·       The net forecast below did show some slight improvement and included some budget pressures around homelessness and savings that had been built into the forecast.

·       The forecast end of year HRA reserve balance showed an increase to £981k from an operating position of £482k. Appendix A to the report provided a detailed summary. It was stated that the HRA was starting to experience more stability with regards to the inhouse repairs and maintenance service and that volatility around that forecast was starting to steady.

·       The General Fund Capital programme showed a reprofiled capital programme and no changes in the budget totals. The additional funding of £3m approved by Full Council on 6 November 2024 for the Alexandra Theatre had not been included due to timings as this quarter 2 report included everything up to the end of September 2024. This would be added to the Quarter 3 report.

·       Pages 8 to 9 provided more detail about the reprofiled capital budgets against the forecast figures. This did not include the original budgets, but did include a commentary on capital slippage

·       On the HRA capital programme - £6.7m had been moved from the stock development budget. Members would be advised later as to how that money would be spent.

·       The Sheltered Housing and Decarbonisation schemes had all been moved into future years to align with new commencement dates.

·       On the consolidated revenue budget summary - £165k less drawdown from usable reserves was a positive sign and had been due to having additional unexpected income from business rates. A further £100k had been received from non ring-fenced grants for new burdens funding received in year. On the cost of service, the forecast outturn suggested a £163k overspend against budget including pressures around temporary accommodation and approved savings, which were forecast to be £564k less than anticipated.  

·       The savings progress by Committee had been provided at Page 6 of the appendix. It was reported that there were some areas of concern, but it was anticipated that most of these would be delivered in the 25/26 budget

·       The HRA reserve forecast showed an increase to £989k  from £482k. The expectation was to achieve a surplus of around £1m which should be realistic as the main risk areas were settling down. 

·       General Fund capital programme – the 24/25 programme forecast expenditure was £14.2m against a reprofiled budget of £13.8m. Details had been included in Appendix A.

The Chair before inviting questions from Members, stated that the Council was eagerly awaiting the Local Government Finance Settlement which was due on 19 December 2024. He had attended a recent webinar with the Ministry of Housing Communities and Local Government [MHCLG] but could not confirm the likely settlement figure that the Council would receive. The Settlement would be discussed as part of the next item on the agenda.

 The Chair then invited questions from Members. The first question related to the presentation of the forecast figures being listed as budget for 2024/25. Looking at sheltered accommodation for 2024/25, no figure had been provided. Concern was expressed that Councillors had approved that £2m would be spent during 2024/25 on these schemes and this had not taken place. Concern was also expressed over the fact that some projects required feasibility studies to be undertaken to allow those projects to be profiled. This meant that the figures should have never been in the budget in the first place as the feasibility work had not been undertaken to do them.

Reference was again made and concerns raised over project slippage. This was a concern that had been repeatedly raised covering the last few cycles of meetings and the Interim Chief Executive Officer had confirmed that this was untrue. There had been multiple projects that had run over time and budget and so confirmation was sought that the concerns that had been raised were legitimate.  The Chair agreed that some projects had not progressed at the speed they should have and that there were sound reasons to explain that and, in some instances, this had been due to circumstances that were beyond the Council’s control. The Section 151 Officer stated that he accepted the points that had been made in terms of how the budget figures had been illustrated within the report but referred Members to Page 7 of the Appendix which was a new page designed to capture this information and to make the report easier for Members to understand. He confirmed that if Members decided that they wished to have more information added regarding original budgets, he would be happy to incorporate the request in producing the Quarter 3 budget monitoring report.

The Chief Executive in contributing to the debate on project slippage and budget overspending stated that she agreed with the comments made by the Chair recognising that projects did sometimes slip and often that this was beyond the Council’s control or was because the Council had insufficient resources available to take a project forward. The Councillor who had raised this as a concern stated that it was important to discuss so that Councillors had full understanding in setting the budget. He also added that it had been disappointing to be told the concern raised had not been accurate, but it was pleasing to have on record that the correction had been made. 

Approval was given by the Committee for a non-Committee Member to address the meeting. Concern was expressed regarding the savings progress made by committee and in relation to the Environment and Housing & Wellbeing Committees. The first concern was over car parking income as this showed an underperformance of £196k in terms of income targets. The second related to the fact that £205k temporary accommodation savings were unachievable. They stated that these were startling under achievements and warranted further investigation and scrutiny.

In response, the Group Head of Finance and Section 151 Officer confirmed that he would happily provide a detailed response outside of the meeting. He also reminded Members that when the savings were presented, he was clear that there was a level of risk around the delivery of some savings.