Agenda item

To consider the report on the 2024/25 General Fund Revenue Budget Monitoring – Month 3

The Service Director, Finance & Procurement, Nicola Hix, gave a report on the General Fund Revenue Monitoring Report for the end of June 2024, Q1, Month 3. The forecast was an underspend of £0.2m for the 2024/25 financial year. 

 It was noted that the main variances were:

• Adults Services favourable variance of £2.1m due to the commissioning work carried out with the market to reduce residential and nursing weekly fees.
• Children, Families & Education Services adverse variance of £5.4m, predominantly relating to external placements.
• Climate & Place adverse variance of £4.3m relating to an increase in Waste Services contract costs, as well as pressures in highway safety defects, capitalisation of salary costs and unachievable income targets.
• Community Services adverse variance of £1.1m due to pressures within Open Spaces and Coroners.
• Non-Service favourable variance of £2.6m largely relating to higher investment income and lower debt charges than anticipated.
• Contingency budget of £6m remains unallocated at month 3

The Committee were taken through the various appendices of the report with Nicola pointing out that the Council had inherited a substantial amount of legacy debt from the former 5 councils and that although improvements had been made, there was still room for more. In particular, this related to more timely despatch of invoices and more officers focussed on debt collection. She also noted that the Council’s Corporate Debt Policy needed to be revised.

Nicola Hix further commented that the Spend Boards had aided the Council’s financial position and were still in place, although the limit of spend before the Spend Board is involved had been increased from £100 to £500. The requirement for the provision of Purchase Orders up front had improved the issue with retrospective orders, which had been causing a problem with tracking spend. The number of retrospective orders had significantly reduced.

In the discussion which followed, Members made the following comments:

• Placement costs for children coming into care has increased significantly. Investigations underway to understand why this is.
• Costs of unregistered placements are dropping but rising for registered placements.
• There are contract difficulties which are causing issues for placing young adults in accommodation outside of the contract.
• There is an underspend on foster care which isn’t necessarily good. A deeper investigation is required into the provision of foster care in Somerset.
• The inflationary pressures that schools face are concerning. Reserves have exceeded the statutory override which is due to finish in March 2026.
• Spend boards are very resource heavy so the spend limit has increased to £500. This can be reversed if non-compliance is noted.
• The delays in the delivery of Homes and Horizons homes 6,7 and 8 are partly due to the spend boards. There is no particular delay caused by planning. There is a good relationship with Planning officers and the Legal teams.
• The average cost of a care home place is £800 per week. The cost of care home fees, direct fees and care home packages equates to 90% of the budget. Nursing care fees are partly funded by the NHS.
• The number and value of outstanding Licensing debts was noted and the average was £200. Councillor Carswell queried why payments for licences were not required up front.

Members noted the report and the Chair requested that going forward, the report should include some baselines on the graphs to enable comparisons to the previous year’s figures.