Agenda item

Budget monitoring and forecasting are key in ensuring sound financial control and control of spending is in place. It is also a major part in ensuring sound governance arrangements.

The purpose of this report is to appraise the Policy and Finance Committee of its forecast outturn against the 2023/24 budgets, which were approved by Full Council at its meeting on 9 March 2023. The report sets out in further detail the Committee’s Revenue and Capital programme budget forecast projections to the 31 March 2024.

 Group Head of Finance and Section 151 Officer presented to Members the Budget Monitoring Report to 30 June 2023.

          This report was asking the Committee to note that an additional £750k would need to be added to the capital programme in respect of capital works to the harbour wall at Littlehampton Harbour as it was currently a statutory requirement. Members were also being asked to note that the Housing Revenue Account (HRA) would continue to be closely monitored to ensure that corrective action would be taken if required. A report would be taken to the next meeting of the Housing and Wellbeing Committee on 23 November 2023.

          There were virements that the Committee needed to approve, and Members were reminded that this did not mean that this was additional expenditure.  Appendix 1 of the report set out the quarter 1 revenue budget forecast performance for the year at £34.377m against a budget of £35.042, resulting in a forecast underspend of £665k. The significant variances had been set out within the report and the reasons for the underspend had been presented to Service Committees over the last cycle of meetings.

Due to increases in interest rates it was positive to be able to report an overachievement of investment income. Members were reminded that within the 2023/24 budget, £3m had been set aside for the transformation budget but there was also the need to identify £2m savings in 2023/24. An update would be reported in greater detail in the Quarter 2 report.

Other appendices set out the General Fund forecast, the capital programme, the HRA and associated cost pressures. The £750k mentioned earlier for the Littlehampton Harbour wall was not presently in the capital programme but would need to be added. The three capital projects approved by Full Council on 19 July 2023, would appear in the Quarter 2 forecast. The HRA was looking at a current overspend of £179k, however, following major review work taken place since then it was anticipated that this figure would change significantly. Members were reminded that an update report would be provided to the next meeting of the Housing & Wellbeing Committee and then reported to this Committee on 6 December 2023. 

Finally, looking at earmarked reserves, it was anticipated that by the end of the financial year these would reduce to around £19.7m.

The Chair invited questions from Members. It had been highlighted that the £2m savings target would probably not be achieved and the £3m transformational budget would not be fully spent. It was explained, as mentioned under the previous agenda item, that more detail would be provided in the Quarter 2 report.

It was stated that it would be very difficult for Members to be expected to make major budgetary decisions in February 2024 without being provided with all the details around savings and not knowing what savings could be achieved in 2023/24. It was again emphasised that this work was currently underway with proposals coming forward for Members to see and be updated on hopefully before Christmas.

Following further discussion, a request was made that some recommendations be voted on separately, these were Recommendations 1.2 to 1.4 and then Recommendation 2.2.

Councillor Birch then formally proposed Recommendations 1.2 to 1.4 which were seconded by Councillor Nash.

The Committee

          RESOLVED

1.2      To note the report;

1.3      Note that an additional £750,000 will be added to the Capital Programme in respect of capital works at Littlehampton Harbour as outlined in Paragraph 4.4 of the report; and

1.4      Note that the Housing Revenue Account (HRA) will continue to be closely monitored to ensure that corrective action is taken if required and reported back to this Committee.

Councillor Nash then formally proposed the remaining recommendations which were seconded by Councillor Birch.

The Committee

RESOLVED – That the Committee aprove

2.2 (a) A virement of £190,000 be made from the Corporate Support Committee budget to the Economy Committee Budget;

2.3 (b) A virement of £34,423 be made from the Policy & Finance Committee budget to the Corporate Support Committee budget and

2.4 C) The Capital programme be reviewed and amended when required to reflect future costs forecasts and expenditure profiles.