Issue - meetings

2024/25 Quarter 3 Revenue and Capital Monitoring and Forecast Outturn

 

 

Meeting: 05/02/2025 - Executive (Item 75)

75 2024/25 Quarter 3 Revenue and Capital Monitoring and Forecast Outturn pdf icon PDF 1 MB

Additional documents:

Decision:

ORDERED that Executive approve:

 

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

2.    The inclusion of additional expenditure budgets to the Capital Programme totalling £0.430m for 2024/25 which were externally funded as detailed in Appendix eight of the report). This will increase the approved 2024/25 Capital Programme budget to £107.141m.

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

 

AGREED that Executive note:

 

1.    The forecast 2024/25 revenue outturn as at Quarter three of £143.184m against an approved budget of £143.190m. This was an underspend of £6,000 (£0.006m) (0.00%) as summarised below and detailed in Table one of the report. This was an improvement of (£1.388m) from the £1.382m forecast year-end overspend reported at Quarter Two.

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

3.    The Council was dependent upon Exceptional Financial Support (EFS) in setting the budget for 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 £4.7m, which related only to the element used to balance the budget detailed in paragraph 4.5 of the report.

4.    It was essential that all available measures were taken by management to maintain revenue expenditure within the approved budget, given the marginal Quarter three forecast underspend. If an overspend occurred 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.    Based upon the Quarter three forecast outturn, the forecast revenue balances at 31 March 2025 would be £21.369m which was in line with that recommended in the approved Reserves Policy:

 

·         General Fund Reserve of £11.100m (minimum recommended)

·         Council’s unrestricted usable earmarked reserves of £10.269m

 

6.    The 2024/25 Capital Programme forecast year-end outturn of £65.158m at Quarter three was a reduction of £41.983m (39.18%) from the revised Quarter three budget of £107.141m comprising:

 

·         An underspend on projects of £12.303m

·         Slippage on projects of £29.680m into 2025/26 and 2026/27

 

7.    The current forecast deficit of £6.400m for 2024/25 related to the High Needs Block with the Dedicated Schools Grant which increased the forecast cumulative deficit to £20.693m at 31 March 2025. If the statutory override was removed by Government on 31 March 2026 without a national funding solution in place for High Needs, then this presented a critical risk to the Council’s financial viability, given that it would significantly deplete the Council’s general fund reserves. The DSG recovery actions and risks to the Council’s financial resilience were set  ...  view the full decision text for item 75

Minutes:

The Executive Member for Finance submitted a report for Executive consideration.

 

The report discharged the responsibilities of the Executive to manage and control the revenue budget, capital programme and overall balance sheet position of the Council.

 

The Council’s Scheme of Delegation gave Executive collective responsibility for corporate strategic performance and financial management, monitoring and control. Standing Orders and Financial Procedures required Executive’s approval for major virements between revenue budgets, and in-year changes to the Council’s Capital Programme within approved Council resources within the approved policy

framework.

 

The report enabled Executive to discharge its financial management responsibilities by setting out the Council’s position at Quarter three.

 

Financial Procedure Rule 18.38.3 of the Council’s constitution required Executive’s approval of revenue and capital programme budget virements over £250,000.

 

Section 25 of the Local Government Act 2003 required the Chief Finance officer to report on the robustness of the budget estimates and the adequacy of the financial reserves to Council in agreeing its annual budget and precept for the forthcoming financial year. The Chief Finance Officer was defined in S151 of the Local Government Act 1972 and was fulfilled by the Director of Finance.

 

The previous Director of Finance (S151 Officer) issued her Section 25 Report to Council Members, presenting the 2024/25 Revenue Budget, Medium Term Financial Plan, and Council Tax setting report approved by Council on 8 March 2024. The report set out the basis upon which the revenue budget was considered to be robust and the basis upon which reserves were considered adequate, being dependent upon the approval of Exceptional Financial Support (EFS) by the Ministry of Housing, Communities and Local Government (MHCLG) (formerly DLUHC) which were summarised in the table at appendix 4.5 of the report.

 

Based on the current forecast outturn position, only up to £4.700m of this will be required in 2024/25 relating to the element required to balance the 2024/25 budget.

 

The Council’s financial position remained fragile. Its ability to control expenditure within the approved 2024/25 budget, whilst developing further savings and income generating opportunities through the Recover, Reset, Deliver Transformation Portfolio in order to balance the MTFP will be crucial to stabilising the Council’s financial position and rebuilding its financial resilience. This required the delivery of all approved £13.9m of 2024/25 savings plans in full.

 

The Council had achieved significant improvement in its financial position from that which existed at the start of the 2023/24 financial year. However, it continued to spend above its available annual income sources in 2024/25, as whilst there was a forecast year end underspend of (£0.006m) for 2024/25, this was after using £4.7m of EFS to balance the budget which meant it was spending £4.7m above annual revenue income streams in 2024/25.

 

In terms of Capital Programme Forecast, on 8 March 2024 Council approved a capital programme for 2024/25 of £88.549m (the original 2024/25 capital budget). This was revised to £97.215m as approved by Executive within the 2023/24 Revenue and Capital Outturn and Development of MTFP report of 26 June 2024 to  ...  view the full minutes text for item 75