Agenda item

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

With reference to paragraph 3 of the Minute of the meeting held on 14 November 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 31 December 2023 along with explanations of the major variances identified between projected outturn and the current approved budget. Services were currently forecasting an unfunded overspend of £3.0m at the end of the financial year. That was £1.7m more than the unfunded position reported to in November. Service pressures continued to be experienced across the Council.  Budget overspends remained within out of area placements for young people (£1.8m) and new overspends in ASN and School transport had been identified of £0.9m due to increased contract pricing.  A further £0.2m overspend in IT and £0.1m less Council Tax income were also reported.  Several actions were agreed on 14th November in order to reduce the level of overspend facing the Council.  The freeze on discretionary spend had not created a material underspend across the Council but was likely to have positively impacted on the individual service positions.  The impact of the freeze on discretionary expenditure would continue to be tracked.  A significant element of expenditure was traditionally incurred in the last quarter of the year and the freeze enacted should be expected to impact during the last 3 months of the financial year.  Further instruction had been issued to managers across the Council reiterating the need to reduce expenditure.  The 6-week delay on recruitment of vacant posts created savings of £0.3m which have been used to partially offset corporate financial plan savings.  Under the Council’s financial regulations, no earmarking, outwith specific Council policy, could take place unless the Council had a balanced outturn position.  Within the overall Q3 position reported, £0.8m of funding which was carried forward from 2022/23 had not been spent and was therefore supporting the Council’s overall position.  Within Resilient Communities £0.5m had not been utilised, mainly relating to No one left behind (£0.375m) and within Properties and Facilities £0.3m set aside to support the delivery of sustainability and carbon reduction had not been used for the original purpose.  The overall overspend of £3.0m posed a significant risk to the Council’s ability to balance the 2023/24 budget, one off measures would be required at the year end to ensure the Council did not overspend this financial year.  Financial plan savings of £11.505m were planned to be delivered in 2023/24.  An analysis of delivery of savings as at the end of quarter 3 was provided in Appendix 3 to the report. That analysis showed that following the December month end £6.348m (55%) savings had been delivered permanently, and £5.157m (45%) had been delivered on a temporary basis through alternative means, that included corporate savings held within Finance and Corporate Governance amounting to £1.994m relating to a new commissioning strategy (£0.250m) and digital transformation (£1.744m).   Members thanked Mrs Douglas for the report and highlighted that the Council was facing one of its most challenging financial situations in its history.  Difficult decisions regarding the long-term financial security of the Council needed to be made, and it was stressed that the Budget Working Group should be convened earlier in the financial year to begin its work on the budget setting process. 

DECISION

AGREED to:-

(a)        note the projected corporate monitoring position reported at 31 December 2023, the remaining pressures identified, the underlying cost drivers of that position and the identified areas of financial risk as contained in Appendix 1 to the report;

(b)       a pause on all non-statutory spend until 31 March 2024 to mitigate some of £3.0m overspend detailed in Appendix 1 to the report;

(c)        note the need to agree robust delivery plans for 2024/25 savings before the start of the next financial year;

(d)        notes the Recovery Fund resources detailed in Appendix 2;

(e)        notes the progress made in achieving Financial Plan savings in Appendix 3; and

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