Agenda item

To consider a report by Councillor Gwyneth Ellis, Lead Member for Finance, Performance and Strategic Assets (copy enclosed) detailing the latest financial position and progress against the agreed budget strategy.

RESOLVED that Cabinet note the budgets set for 2024/25 and progress against the agreed strategy.

Councillor Gwyneth Ellis presented the monthly report detailing the latest financial position and progress against the agreed budget strategy.

A summary of the Council’s financial position was provided as follows –

·       the net revenue budget for 2024/25 was £271.021m (£250.793m in 2023/24)

·       an underspend of £479k was forecast for service and corporate budgets

·       current risks and assumptions relating to corporate budgets and service areas

·       savings and efficiencies for the 2024/25 budget (£10.384m) and progress in delivering savings approved with ongoing tracking/monitoring

·       an update on Schools, Housing Revenue Account and Treasury Management.

The Head of Finance and Audit guided members through the detail of the report.  There was a forecasted underspend of £479k (excluding schools) compared to an overspend of £400k last month.  Services as a whole continued to overspend in areas including Education and Children’s Services, Highways and Environmental Services, and to a lesser extent Planning, Public Protection and Countryside Services and Housing and Communities. The current outturn prediction for Adult Social Care and Homelessness was £510k underspend due to an increase in the underspend on Homelessness of £300k (total £1.3m underspend) netted off by an overspend in Adult Social Care (£790k).  The high risk areas were reiterated which included residential placements in Children’s Services, commissioned care in Adult Social Care and School Transport.  The savings tracker had also been included for information together with the Housing Revenue Account and schools’ position.

The Leader thanked the Lead Member and Head of Service for the detailed report, noting that the budget had been discussed at length at various forums.

Main points of debate focused on the following –

·       Councillor Rhys Thomas drew attention to the excellent work undertaken in the homelessness service, with further savings realised since the previous month with an increase in the underspend of £300k to a total underspend of £1.3m.  The Head of Finance and Audit concurred, highlighting the turnaround from an overspend to an underspend situation and demonstrating what could be achieved when taking a One Council approach

·       there was some discussion regarding the risk associated with the capacity of the Finance Team and new financial system and impact on budget monitoring.  The new system had replaced a number of different financial systems with the forecasting module in place most recently and it would take some time to refine that system with the team under some pressure at present, hence the risk being identified within the report.  In response to a follow up question from Councillor Hugh Irving, the Head of Finance and Audit explained the current position in terms of staffing levels and turnover together with the difficulties in recruitment to particular posts in line with others in the public sector.  Assurances were provided that whilst the Finance Team was under some pressure they were managing and coping under the pressure at the current point in time

·       the complexities of budget planning were highlighted and there was some discussion on the meaning of particular terminology used when referring to risk and assumptions in the budget process.  Officers confirmed that no budget could be set without an element of risk linked to it and in setting budgets consideration was given to expenditure patterns, with particular difficulty in predicting demand led statutory services which had to be provided and therefore presented a higher level of risk in the budget.  In terms of managing risk, it was important to hold sufficient levels of contingency reserves to ensure if risks did materialise, they did not adversely affect the budget and provided some time to deal with those risks as they emerged.  It was accepted that some elements of budget planning had to be based on assumptions with variations in costs, income, and demand but the issues faced over recent years in terms of escalation of energy costs and inflation could not reasonably have been predicted at the time of budget setting and were beyond the Council’s control.    It was important that the Council was honest and transparent in its budget setting, discussing risks and how best to mitigate them.  Councillor Gwyneth Ellis highlighted the importance of careful financial management and maintaining healthy reserves advising that the Council had been financially well managed over a number of years which continued to be the case and stood the Council in good stead going forward to deal with risks.

RESOLVED that Cabinet note the budgets set for 2024/25 and progress against the agreed strategy.