Purpose

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.

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 out
in paragraph 4.38 and Appendix six of the report.

8.   
The level of Middlesbrough’s share of
Collection Fund and General Fund Debtors on 31 December 2024 was detailed in
paragraphs 4.63 to 4.65 and Table 11 of the report.