Decision details

The Executive Member for Finance submitted a report for Executive’s consideration. The purpose of the report discharges the responsibilities of the Executive to manage and control the revenue budget, capital programme and overall balance sheet position of the Council.

ORDERED that Executive:

1.    Approve the proposed revenue budget virements over £250,000 as detailed in Appendix three of the report.

2.    Approve the inclusion of additional expenditure budgets to the Capital Programme totalling £0.523m for 2024/25 which were externally funded and detailed in Appendix Eight of the report. Subject to approval, this would increase the approved 2024/25 Capital Programme budget to £106.711m.

3.    Approve the proposed virements over £250,000 between schemes in the 2024/25 Capital Programme approved by Council in March 2024 which were funded from within existing Council resources which was detailed in Appendix Eight of the report.

AGREED that Executive:

1.    Note the forecast 2024/25 revenue outturn as at Quarter Two of £144.572m against an approved budget of £143.190m. This was an overspend of £1.382m (0.97%) as summarised below and detailed in Table one in the report. This was an improvement of £2.360m from the £3.742m forecast year-end overspend reported at Quarter One.

2.    Note the progress on savings delivery set out in Tables three and four and Appendix four of the report.

3.    Note that the Council was dependent upon Exceptional Financial Support (EFS) in 2024/25 approved in principle by the Ministry of Housing, Communities & Local Government (MHCLG) of up to £13.4m of one-off borrowing, the costs which were factored into the MTFP. Of this sum £4.7m had been utilised to achieve a balanced budget in 2024/25. The forecast use of EFS had been reduced to up to £8.2m, detailed in paragraph 4.5 of the report.

4.    Note that it was essential that all available measures were taken by management to control revenue expenditure within the approved budget, given that the Quarter Two forecast overspend, if realised, would potentially require further £1.382m of EFS borrowing to fund slippage in savings delivery. If the overspend increased in the remainder of 2024/25 this would require further use of EFS or reserves. Both EFS and reserves could only be used once, and the financial pressure would remain in 2025/26 to be addressed.

5.    Note that based upon the Quarter Two forecast outturn, the forecast revenue balances at 31 March 2025 would be at £18.914m which was in line with that recommended in the approved Reserves Policy:

·         General Fund Reserve of £11.1m (minimum recommended)

·         Council’s unrestricted usable earmarked reserves of £7.814m

6.    Note the 2024/25 Capital Programme forecast year end outturn of £72.546m at Quarter Two was a reduction of £34.165m (32.02%) from the revised Quarter One budget of £106.711m comprising:

·         An underspend on projects of £8.720m

·         Slippage on projects of £25.445m into 2025/26 and 2026/27

7.    Note the current forecast deficit of £5.935m for 2024/25 relating to the High Needs Block with the Dedicated Schools Grant which increased the forecast cumulative deficit to £20.228m at 31 March 2025. If the statutory override was removed by Government on 31 March 2026 without national funding solution in place for High Needs, then this presented a critical risk to the Council’s financial viability, given that it would wipe out the Council’s general fund reserves. The DSG recovery actions and risks to the Council’s financial resilience were set out in paragraph 4.39 and Appendix six of the report.

8.    Note The level of Middlesbrough’s share of Collection Fund and General Fund Debtors at 30 September 2024 was as follows and detailed in paragraphs 4.56 to 4.58 and Table 11 of the report:

·         Council Tax £34.713m

·         Business Rates £6.592m

·         Sundry Debt £14.299m

·         Housing Benefit Overpayments £6.196m