Decision details

The Service Director, Finance & Procurement, Nicola Hix, gave a report on the General Fund Revenue Budget Monitoring Report for the end of August (Month 5).  The forecast was a revenue overspend of £5.324m within Service Directorates for 2024/25, offset by the £6m unallocated Corporate Contingency, leading to a total revenue forecast underspend of £0.736m. There has been a decrease of £3.127m in the revenue forecast overspend position of £2.300m reported for month 4.

It was noted that the main variances were:

• Adult Services has increased the forecast underspend by £0.800m from Month 4 to a forecast underspend of £2.809m due to commissioning work carried out to reduce residential and nursing weekly fees.
• Children’s Services are forecasting an overspend of £7.512m mainly due to an overspend of £7.584m on the external placements budget due to the rising numbers of children coming into care with many of these children moving into high cost residential and unregistered placements.
• Community Services are forecasting an underspend of £0.447m which is an increase of £1.447m since Month 4. This is mainly due to confirmation that £1.2m of legacy budgets are still being held within Leisure and are no longer required.
• Climate & Place is forecasting an overspend of £4.295m mainly due to increases in Waste Services contract costs.
• Strategy, Workforce & Localities are forecasting an overspend of £0.667m mainly due to forecast overspends in Legal due to reliance on locum/agency lawyers because of recruitment challenges.
• A forecast outturn underspend of £3.123m due to financing costs being lower than budgeted.
• The Corporate Contingency budget remains unallocated, however all £6.000m has been released into the forecast outturn.

The Committee were taken through the various appendices of the report with the Service Director, Finance & Procurement pointing out that there was continued work with Directorates to ensure that the assumptions within the forecast are relevant and robust.

The Service Director, Finance & Procurement further commented that the Spend Control Boards remain in place, and the monitoring and outcomes of these boards are included in the quarterly monitoring reports to Executive. This has encouraged the whole organisation to think differently, and if savings in one area cannot be achieved, Directorates are expected to find other ways of making those savings. This is essential in order to maintain control over the Council’s budget.

In the discussion which followed, Members made comments which were responded to as follows:

• Action needs to be taken to ensure the forecast overspend for Children’s Services isn’t increased any further. The budget is appropriate but further action is needed.
• A Children’s Finance Recovery Board has been established to focus on recovery actions in the short and medium term.
• Any movement on the savings to be delivered are being tracked and all areas are being held to account.
• The urgency of getting Children’s Services is recognised and are trying not only to manage the areas of overspend and non-delivery but also looking ahead and not always having to be reactive to crisis.
• Actions need to be completed by the start of the next financial year but ideally before the next budget set in February 2025.
• The government decision on the statutory override is currently awaited as to whether the deficit can be carried on the balance sheet. It is expected to be extended by that would be a temporary solution.
• The cost of running the LCNs will be verified and reported back to the Committee as they are unlikely to be as costly as £1m as indicated by the Committee Member who proposed they be removed from the budget until such time as they could be afforded.
• The reductions in works done by highways and waste services which affect all residents are recognised but there is £6m in contingency funding to deal with any unexpected one-off costs if needed in the current financial year.
• We are already using a significant number of reserves and do not want to draw down on the reserves any more than has already been committed.

At the conclusion of the discussion Members noted the report and the Chair summed up the discussions, including the need for clarity in the reporting and the inclusion of previous year’s data for comparison.