Purpose

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.

 

Decision

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.