Agenda item

Consider report by Director – Finance and Procurement. (Copy attached.)

3.1       With reference to paragraph 4 of the Minute of the meeting held on 15 August 2023 there had been circulated copies of a report by the Director – Finance and Procurement which provided budgetary control statements for the Council’s General Fund based on actual expenditure and income to 30 September 2023 along with explanations of the major variances identified between projected outturn and the current approved budget.  Budget pressures continued to be experienced across the Council as a result of activity levels, statutory requirements and the ongoing impact of high inflation levels. That posed a significant risk to the Council’s ability to balance the 2023/24 budget.  Unfunded pressures of £1.3m were currently being reported at this point in the current year which had arisen as a result of further demand and inflationary cost increases associated with placements within Children and Families Social Work.  Further pressures of £3.1m associated with inflation and the ongoing implications of COVID recovery had been identified across the Council and were being managed within existing service budgets.  In response to those significant budget pressures the Council Management Team (CMT) had agreed a number of management actions to enable the Council to deliver a balanced year end position. Those actions were intended to fund the identified pressures of £1.3m in Children and Families Social Work and also support services to manage their services within existing budget.  The measures included the introduction of a 6-week recruitment delay to non-frontline staffing to increase savings from natural staff turnover; restriction on discretionary spend budgets not yet committed over the remainder of the year; and limiting future earmarking to that specifically agreed by Council Policy e.g. DSM, Second Homes council tax at this time.  Financial plan savings of £11.5m required to be delivered in 2023/24.  An analysis of deliverability was shown in Appendix 3 to the report. Following the September 2023 month end £6.2m (53%) savings had been delivered permanently by September, £3.8m (33%) were profiled to be delivered by 31 March 2024 and £1.6m (14%) had been delivered on a temporary basis through alternative savings.

3.2       The Director – Finance and Procurement presented the report and responded to Members questions.  In response to a question regarding the cost of utilities, Mrs Douglas explained that the Council purchased its utilities in advance, which was of benefit when costs were increasing.  Discussions were ongoing at local and national level to understand the implications of the cost of utilities decreasing.  Regarding the ongoing early years review, Mrs Douglas confirmed that the review was focused on allowing service managers to operate with a lower funding envelope and undertook to provide further details at a future meeting.  In response to a question regarding the 6-week freeze on the hiring of non-frontline staff, Mrs Douglas explained that there was no strict definition of staff to be considered as frontline. Staff working in schools, care and roads were to be considered frontline.  It was confirmed that Directors could proceed with hiring in instances where they had deemed filling a post essential.  The Chief Executive confirmed that a report on out of area children’s placements was expected to be presented in December.  Regarding the impact of savings on the older people budget, Mrs Douglas outlined that as part of the financial planning process money that was ring fenced by the Scottish Government for the delivery of specific services was placed in holding locations. Virements reflected the reporting of the movement of those funds to where they were needed. It was confirmed that work to review saving plans was undertaken on a continual basis. 

DECISION

AGREED to:-

(a)        note the projected corporate monitoring position reported at 30 September 2023, the remaining pressures identified, the underlying cost drivers of this position and the identified areas of financial risk as reflected in Appendix 1 to the report;

(b)       note the CMT management actions agreed to mitigate the pressures contained within Appendix 1 and request a report on Placements within Children and Families Social Work to explain the current challenges within the service and how the Council intends to address the issues;

(c)        note the impact of ongoing service pressures on the 2024/25 Financial planning process

(d)        note the Recovery Fund resources detailed in Appendix 2 to the report;

(e)        note the progress made in achieving Financial Plan savings in Appendix 3 to the report and

(f)         approve the virements attached in Appendices 4 and 5 to the report.