Agenda item

SUSPENSION OF COUNCIL PROCEDURE RULE NO. 4.13.2 – ORDER OF BUSINESS

 

In accordance with Council Procedure Rule No. 4.57, Executive agreed to vary the order of business to deal with the items in the following order: 6, 5 and 7.

 

The Mayor and Executive Member for Finance and Governance submitted a report for Executive consideration.

 

The report summarised the General Fund revenue and capital outturn and reserves position for the financial year 2023/24 and highlighted the areas of particular financial challenge. The report also summarises the financial position for Dedicated Schools Grant for 2023/24 as well as the debtors position at 31 March 2024 and highlighted the work to be undertaken to increase recovery of debt owed to the Council.

 

The report sought approval from Executive in relation to revisions to the Capital Programme and approval of new grants into the budget framework. It also set out the further work to be undertaken to review the 2024/25 budget assumptions and development of the 2025/26 MTFP in light of the 2023/24 financial outturn.

 

The Council’s Scheme of Delegation gave Executive collective responsibility for corporate strategic performance and financial management / monitoring, together with associated actions. 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.

 

The Executive Member commented that further reductions to the Council’s overspend was positive and this was in part due to a robust programme of budget monitoring processes. However, there remained significant work to do, namely via Transformation projects, to ensure the Council’s financial stability.  

 

The table relating to debt collection performance had undergone minor amendments since the meeting papers had been published.

 

ORDERED that, in respect of the Capital Programme, Executive approve the inclusion of additional expenditure budgets to the Capital Programme for 2023/24 totalling £5.012m (summarised in Table 8) which were externally funded. These adjustments had increased the approved 2023/24 Capital Programme budget to £72.643m.

 

AGREED that:

 

In respect of the General Fund Revenue Budget, Executive:

1.    Note the 2023/24 net revenue budget year-end outturn as of £129.948m against an approved budget of £126.354m, a final overspend of £3.594m (2.8%) as analysed in Table 1 in paragraph 4.12 of the report.

2.    Note that an analysis of one-off vs ongoing variances, in 2023/24 had been undertaken as set out in paragraph 4.15 and Appendix 1, and this would be used to review and assess the 2024/25 budget allocation of growth and any revisions will be reported in Quarter One 2024/25 monitoring.

3.    Note that £2.399m of qualifying revenue expenditure had been funded from Flexible Use of Capital Receipts (FUOCR) in accordance with the FUOCR strategy approved by Council on 17 January 2024 (Table 9 and Appendix 5 of the report).

4.    Note a bid of £0.199m had been made by the Director of Children’s Services to DfE for an additional improvement grant for 2024/25. If successful, this would be incorporated into the relevant budget in order to support the funding of transformation and savings delivery for 2025/26 onwards as well as support practise improvements in progressing young people to permanence (paragraph 4.13).

 

In respect of the Council’s Reserves and Provisions, Executive:

1.    Note the General Fund Balance of £10.986m and unrestricted usable earmarked reserves of £1.069m at 31 March 2024

2.    Note the cumulative usable Collection Fund surplus of £8.325m at 31 March 2024 and the s151 Officer’s action to apply this sum at budget setting 2024/25 in order to replenish the General Fund Balance to the recommended minimum level of £11.1m and unrestricted usable earmarked reserves at £9.280m at 1 April 2024 in accordance with Council approvals on 8 March 2024.

3.    Note that the combined total of unrestricted usable reserves at 1 April 2024 stand at £20.380m (14.2% of the 2024/25 Net Revenue Budget of £143.190m) and that this level remained very low compared nationally to all unitary councils as illustrated in comparisons set out in the Reserves Policy approved by Council on 8 March 2024.

 

In respect of the Dedicated Schools Grant (DSG), Executive:

 

1.    Note the total in-year deficit of £7.729m for 2023/24 mainly due to an overspend of £8.058m relating to the High Needs Block, which was an increase of £1.085m from the total £6.644m deficit reported at Quarter Three. The increase was mainly due to higher demand for specialist provision as inclusion of pupils within mainstream settings had remained a challenge.

2.    Note that a range of management actions were being taken to address the increase in expenditure alongside the DfE Delivering Better Value (DBV) programme (paragraph 4.27 of the report) which aimed to support the financial recovery of the DSG position. This included service plans on reviewing exceptional support funding, increasing pupil exclusion recharges and recoupment of assessment places as part of reducing this over-spending in 2024/25 onwards.

3.    Note the total cumulative deficit of £14.293m at 31 March 2024, including £15.079m relating to the High Needs Block.

4.    Note that under current government regulations implementing a ‘statutory override’ in place to the end of 2025/26, this deficit could not be funded from the General Fund, and the Council was required to deliver a recovery plan to the Department for Education (DfE).

5.    Note that this position presented a potential significant risk in medium to long- term relating to the Council’s financial sustainability if no government solution was reached before the statutory override was removed and this was a national issue that required resolution.

 

In respect of the Capital Programme, Executive:

 

Note the 2023/24 Capital Programme final outturn of £47.714m, which was a

favourable variance of £24.929m (34%) from the revised £72.643m budget for

2023/24 comprising:

·         An underspend on projects of £2.218m

·         Slippage on projects of £22.711m into 2024/25.

 

In respect of the level of Collection Fund and General Fund Debtors at 31 March 2024, Executive Noted the following:

·         Council Tax £36.773m

·         Business Rates £8.391m

·         Sundry Debt £15.516m

·         Housing Benefit Overpayments £6.741m

 

In relation to the Council’s financial recovery and resilience, Executive:

1.    Note the approach to strengthening financial discipline during 2024/25 as set out in paragraphs 4.61 to 4.68 of the report.

2.    Note the actions being taken to improve budget management and forecasting in preparation for the development of the 2025/26 MTFP.

3.    Note the critical role that the development of a further pipeline of transformation projects and initiatives would have in relation to achieving financial recovery and rebuilding the Council’s financial resilience.

 

OPTIONS

 

No other options were considered as part of the report.

 

REASONS

 

To enable the effective management of finances, in line with the Council’s Local Code of Corporate Governance, the Scheme of Delegation and agreed corporate financial regulations.