Subject: Targeted
Budget Management (TBM) 2024/25 Month 7 (October)
Date of meeting: Thursday, 5 December
2024
Report of: Cabinet
Member for Finance & Regeneration
Contact
Officer: Name: Nigel Manvell, Chief
Finance Officer
Tel: 01273 291233
Email: nigel.manvell@brighton-hove.gov.uk
Ward(s) affected: (All Wards)
Key Decision: Yes
Reason(s)
Key: Expenditure
which is, or the making of savings which are, significant having regard to the
expenditure of the City Council’s budget, namely above £1,000,000 and is significant
in terms of its effects on communities living or working in an area comprising
two or more electoral divisions (wards).
For general release
1.1
The Targeted Budget Monitoring (TBM) report is a
key component of the council’s overall performance monitoring and control
framework. This report sets out an indication of forecast risks as at Month 7
on the council’s revenue and capital budgets for the financial year 2024/25.
Effective financial management is a core component of providing a well-run
council, a key priority within the Council Plan that demonstrates that the
council manages within its finite resources and optimizes the use of those
resources.
1.2
The forecast outturn ‘risk’ for 2024/25 at this
stage is a £6.808m overspend on the General Fund revenue budget representing 2.6%
of the net budget and approximately 1.3% of the gross budget. This includes a
forecast overspend risk of £1.735m on the NHS managed Section 75 services.
1.3
A significant level of savings is also shown to be at risk with the
report indicating that £4.471m (19%) of the very substantial savings package in
2024/25 of £23.627m is potentially at risk.
1.4
The forecast indicates an improvement of £0.521m since the Month 5
forecast and remains a significant overspend risk. As outlined in the month 5
TBM report to Cabinet, strengthened recruitment and spending controls have been
instigated to provide assurance that the position can be managed down over the
remaining months of the year. However, the impact of these controls,
particularly recruitment, will usually take 2 to 3 months to filter through to forecasts.
2
Recommendations
2.1
Cabinet notes the forecast risk position for the General Fund, which
indicates a potential forecast overspend risk of £6.808m.
2.2
Cabinet notes the forecast outturn includes a forecast overspend risk of
£1.735m on the NHS managed Section 75 services.
2.3
Cabinet notes the forecast breakeven position for the separate Housing
Revenue Account (HRA).
2.4
Cabinet notes the forecast overspend risk for the ring-fenced Dedicated
Schools Grant, which is an overspend of £1.158m.
2.5
Cabinet notes the forecast position on the Capital Programme which is an
underspend variance of £1.296m.
2.7
Cabinet notes the Treasury Management mid-year review 2024/25 as set out
in Appendix 7.
3
Context and background information
Targeted Budget Management (TBM) Reporting
Framework
3.1
That The TBM framework focuses on
identifying and managing financial risks on a regular basis throughout the
year. This is applied at all levels of the organisation from Budget Managers
through to Cabinet. Services monitor their TBM position on a monthly or
quarterly basis depending on the size, complexity or risks apparent within a
budget area. TBM therefore operates on a risk-based approach, paying particular
attention to mitigation of growing cost pressures, demands or overspending
through effective financial recovery planning together with more regular
monitoring of high risk demand-led areas as detailed below.
i) General
Fund Revenue Budget Performance
ii) Housing
Revenue Account (HRA) Performance
iii) Dedicated
Schools Grant (DSG) Performance
iv) NHS
Controlled S75 Partnership Performance
v) Capital
Investment Programme Performance
vi) Capital
Programme Changes
vii) Implications
for the Medium Term Financial Strategy (MTFS)
viii) Comments of
the Chief Finance Officer (statutory S151 officer)
4
General Fund Revenue Budget Performance (Appendix 3)
4.1
The table below shows the forecast outturn for
council-controlled revenue budgets within the General Fund. These are budgets
under the direct control and management of the Corporate Leadership Team. More
detailed explanation of the variances can be found in Appendix 4.
|
Forecast
|
|
2024/25
|
Forecast
|
Forecast
|
Forecast
|
|
Variance
|
|
Budget
|
Outturn
|
Variance
|
Variance
|
|
Month 5
|
|
Month 7
|
Month 7
|
Month 7
|
Month 7
|
|
£'000
|
Directorate
|
£'000
|
£'000
|
£'000
|
%
|
|
(530)
|
Families,
Children & Learning
|
69,570
|
68,982
|
(588)
|
-0.8%
|
|
4,010
|
Housing,
Care & Wellbeing
|
125,693
|
130,235
|
4,542
|
3.6%
|
|
1,732
|
City
Services
|
46,196
|
47,401
|
1,205
|
2.6%
|
|
43
|
Corporate
Services
|
34,734
|
34,853
|
119
|
0.3%
|
|
5,255
|
Sub
Total
|
276,193
|
281,471
|
5,278
|
1.9%
|
|
2,074
|
Centrally-held
Budgets
|
(18,499)
|
(16,969)
|
1,530
|
8.3%
|
|
7,329
|
Total
General Fund
|
257,694
|
264,502
|
6,808
|
2.6%
|
4.2
The General Fund includes
general council services, corporate budgets and central support services. Corporate Budgets include centrally held provisions and
budgets (e.g. insurance) as well as some cross-cutting value for money savings
targets. Note that General Fund services are accounted for separately to the
Housing Revenue Account (Council Housing). Note also that although part of the
General Fund, financial information for the Dedicated Schools Grant is shown
separately as this is ring-fenced to education provision (i.e. Schools).
4.3
The chart below shows the monthly forecast variances for 2024/25 and the
previous three years for comparative purposes. This indicates that forecast
risk early in the year has been higher in recent years. This is partly due to:
·
Pay
awards coming in higher than the budget assumptions due to persistent inflation;
·
The
requirement to deliver successive, large savings programmes which becomes
increasingly challenging over time and with greater delivery risks;
·
Challenging
economic conditions which are impacting external provider costs, many income
sources (demand), and recruitment costs and which is difficult to predict with
accuracy.
Last year, 2023/24, was also
exceptional in terms of the availability of one-off resources of over £10m
across the year, which significantly aided in addressing forecast risks.
Demand-led
Budgets
|
Forecast
|
|
2024/25
|
Forecast
|
Forecast
|
Forecast
|
|
Variance
|
|
Budget
|
Outturn
|
Variance
|
Variance
|
|
Month 5
|
|
Month 7
|
Month 7
|
Month 7
|
Month 7
|
|
£'000
|
Demand-led
Budget
|
£'000
|
£'000
|
£'000
|
%
|
|
(831)
|
Child
Agency & In House Placements
|
27,526
|
26,087
|
(1,439)
|
-5.2%
|
|
1,172
|
Community
Care
|
79,415
|
81,504
|
2,089
|
2.6%
|
|
2,424
|
Temporary
Accommodation
|
6,330
|
8,878
|
2,548
|
40.3%
|
|
2,765
|
Total
Demand-led Budget
|
113,271
|
116,469
|
3,198
|
2.8%
|
The chart
below shows the monthly forecast variances on the demand-led budgets for 2024/25.
TBM Focus Areas
4.5
There are clearly ongoing pressures across many
areas of the council, particularly front-line, demand-led areas which is a
clear indicator of the inflationary and demand pressures driven by current
economic conditions. Key areas of pressures are outlined below:
4.6
Children’s Services: The current projected position identifies
potentially significant cost pressures: £0.695m on Home to School transport and
£0.079m on In-House Children’s Disability Provision. These together with
underspends on Children’s Placements of (£1.439m), and other overspends of
£0.228m and a recovery plan of (£0.151m) result in a forecast underspend of
(£0.588m) as at Month 7. Key drivers of the projected position are as follows:
·
Home
to School Transport:
There are several factors contributing to overspends in Home to School
Transport. These include increased demand on the service (both at 5-16 ages,
and 16 up until 19th birthday), increased numbers of children requiring single
occupancy journeys, lack of local SEND school sufficiency, and increased
numbers of routes required to accommodate individual post 16 learners’
timetables. Market
forces within SEND transport are also contributing to overspend in Home to
School Transport. The service is being increasingly impacted by local driver,
vehicle passenger assistant, vehicle shortages and increased running costs.
There is also a lack of competition in the transport market, particularly
minibus providers, which is pushing up contract prices still further. There is
increasingly less capacity in the local system to meet demand, not just in the
numbers of children requiring transport but the nature of the transport
requirements. There is an increase in solo routes being created, both to
educational provisions where they are the only children attending and using
HTST. Since September, we have created 12 more routes and 10 of those have been
solo.
·
In-house
Children’s Disability Provision: Part of the directorate’s savings plan for
2024/25 was to re-commission Tudor House to facilitate savings from existing
external residential disability placements. Due to the details with this scheme
and complications regarding building adaptations this saving of £0.504m is now
being identified as unachievable in 2024/25. However, Drove Road is providing
full time residential provision for one young person which is being fully
funded by Health and full-time care for another young person aged over 18 which
will be funded by Adult Social Care. It is anticipated that these factors will
result in an underspend on the Drove Road budget of approximately £0.405m.
Schools’ Budgets
For 2024/25 there were 31
schools requiring Licensed Deficits which totalled £7.5 million. In July the
Council’s Chief Finance Officer (CFO) and the Corporate Director of Families,
Children and Learning agreed compliant licensed deficits totalling £6.5m. With
net School Surplus Balances of only £281k there are insufficient balances to
license these deficits within the Scheme for Financing Schools. The CFO has
advised that a reserve will need to be identified which this deficit can be set
against. Two schools could not achieve balance within 5 years; these licensed
deficits totalling £1m remain unapproved and further discussions are taking
place.
The forecast for the 2024/25
central Dedicated Schools Grant is an overspend of £1.158m. It is also
important to note that the central DSG budget for 2024/25 includes the one-off
funding from the underspend of £1.275m carried forward from 2023/24.
4.7
Adults Services: The service
faces significant challenges in 2024/25 in mitigating the risks arising from
increasing demands from client needs, supporting more people to be discharged
from hospital when they are ready and maintaining a resilient local provider
market. It is to be noted that this is after applying service pressure funding
of £10.302m in 2024/25 which has been used to fund budget pressures resulting
from the increased complexity and costs of care.
The 2024/25
savings plan for HASC totals £4.712m. There are continued actions focussing on
attempting to manage demand on and costs of community care placements across
Assessment Services and making the most efficient use of available funds.
The HASC
directorate has a Modernisation Programme which aims to implement a consistent
strengths-based approach across key work streams, ensuring robust pathways are
in place, developing a community reablement offer and re-designing the front
door service. Currently the Health & Social Care system is under
considerable pressure, and this is generating additional costs for the council
due to:
·
Pressures
on the system due to short-term grant monies and an unresolved national, long-term
funding solution;
· Significant pressures
on the acute hospital resulting in increased costs to support timely discharge
into residential, nursing and home care;
· Pressures on
NHS outreach and other preventative services including community nursing (known
as Integrated Primary Care Teams);
·
Workforce
capacity challenges across adult social care services.
The funding
of all care packages is scrutinised for Value for Money, ensuring that eligible
needs are met in the most cost-effective manner which will not always meet
people’s aspirations. Established safeguards are in place to provide assurance
within this process.
In respect of financial
recovery and the ongoing management of Community Care Budget pressures, a
monthly savings and efficiencies meeting provides rigorous monitoring and oversight
of the Adult Social Care & Health savings progress. Additionally, each
month the top ten spends on placements and packages of care are reviewed to
ensure immediate remedial action is undertaken to look at options and, wherever
possible, reduce the cost of care whilst meeting assessed need. Negotiations
are also underway with Sussex partnership NHS Foundation Trust regarding
addressing the current high spending commitment within the Mental Health s75
arrangements.
4.8
Housing Services and Temporary Accommodation (TA): In England and Wales, there are now more households in
Temporary Accommodation (112,660) than ever before. Brighton & Hove has
done well to keep numbers stable, but since December 2023 there has been a
steady increase. During 2023/24, this increase in Brighton & Hove was 3%,
compared to 10% nationally.
As well as demand pressures
there are also price pressures, with the average price of nightly accommodation
increasing by 12% since 2023/24. As a result of these pressures, the TA service
is forecast to overspend by £2.548m including £1.146m of savings at risk of not
being met. The overspend is partially offset by financial recovery measures of
£0.280m.
A TA Reduction Plan has been
developed, setting out a range of activities being undertaken to either reduce
the number of households entering into TA; assist households to move on from
TA, or reduce the cost of the TA we are using. These have previously been
reported in TBM reports to Cabinet and are ongoing.
A dashboard has been developed,
with weekly meetings involving Senior Managers within both Housing and Finance
to track the effectiveness of these measures. The overspend relates to the
following elements:
Emergency nightly booked
(Spot Purchased) accommodation is forecast to overspend by £1.674m. As at
17/11/2024, 352 households were housed in nightly booked accommodation which is
192 higher than budgets allow and the forecast assumes this will reduce to 320
level by the end of March 2025, given that the service is aiming to maximise
the use of void council owned stock, where appropriate. Additionally, the price
of nightly booked accommodation has seen a steep increase of around 12%
compared to prices in 2023/24.
The underlying trend is that
the number of households using nightly booked accommodation is increasing due
to changes to the private rented sector with many landlords exiting the market.
This has a double impact on homelessness and the ‘End of Private Rented’ is the
main reason for homelessness, but in the last two quarters, this has increased from
34% of all new cases to 61%.
Booked Accommodation: This
budget is forecast to overspend by £0.749m. The budget assumed that there would
be an average of 261 units of block booked accommodation for the year 2024/25.
The forecast now indicates 379 properties including an additional 39 units
recently acquired to offset the high costs of spot purchase and to offset the
loss of private sector leased accommodation. The council is about to trial a
pilot which would separate the leasing of the property from its management. It
is anticipated this could result in annual savings of £0.345m, as well as
improving the service to residents. The Financial Recovery Plan (FRP) includes
£0.080m cost reduction for this initiative during 2024/25.
The overall position for City
Services is a net £1.205m forecast overspend risk at Month 7, an improvement of
£0.527m since Month 5 by continued actioning of financial recovery plans and
measures.
4.10 Centrally-held Budgets: There is
a forecast overspend of £1.530m on centrally-held budgets. Of this £1.300 m
relates to the estimated additional cost of the 2024/25 pay award in excess of
the amount provided in the budget.
There is also a pressure of £0.700m
on Insurance budgets caused by an increase in the value of claims paid.
There is an estimated pressure
of £0.589m on the Housing Benefit Subsidy budget. The main element of this is a
pressure of £0.709m on a certain benefit type for vulnerable tenants which is
not fully subsidised. This pressure has continued to rise since last year but
is being investigated to assess what steps can be taken to reduce it. This
pressure is partially offset by a forecast surplus of £0.120m on the net
position of the recovery of overpayments.
The corporate ‘Organisational
Redesign’ saving of £2.475m is also held in this area. At present the saving is
at risk although the lead-in time for delivery was always expected to take some
months. In lieu of the lead-in time for delivery, council-wide vacancy
management and some spending controls will remain in place to mitigate the
savings risk. The application of a 1% reduction in salary budgets has produced
a one-off contribution of £1.271m towards this saving in 2024/25.
There is a forecast underspend
of £0.710m on financing costs due to increased investment income as a result of
higher balances than forecast and long term borrowing being delayed until next
year.
There has also been an increase
of £0.238m in the Homes for the City of Brighton & Hove LLP distributable
profit recognised for the financial year ending 31 March 2024, following the
final sign off of the Statement of Accounts for 2023/24.
Monitoring Savings
4.11 The savings package approved by full Council to support the
revenue budget position in 2024/25 was £23.627m following directly on from a £14.173m
savings package in 2023/24 and 14 years of substantial savings packages
totalling over £232m since government grant reductions commenced in 2010, and
which have been necessary to enable cost and demand increases to be funded
alongside managing the reductions in central government grant funding.
4.12 Appendix 4 provides a summary of savings in each directorate
and indicates in total what has been achieved, what has been offset by in year
pressures and the net position of unachieved savings. Appendix 5 summarises the
position across all directorates and presents the entire savings programme. The
graph below provides a summary of the position as at Month 7 and shows that
gross savings of £19.484m have been achieved but that inflationary pressures
(exceptional price increases) have reduced this by £0.328m. Including other
unachievable savings of £4.143m, this means that a total of £4.471m (19%) is
forecast to be unachieved in 2024/25.
5
Housing Revenue Account Performance (Appendix 4)
5.1
The Housing Revenue Account (HRA) is a separate
ring-fenced account which covers income and expenditure related to the
management and operation of the council’s housing stock. The majority of
expenditure is funded by Council Tenants’ rents and housing benefit (rent
rebates). The forecast outturn is breakeven, this position includes an
overspend of £0.050m across service areas offset by an underspend against the
capital financing budgets. The latest forecast includes pressures arising from
the Large Panel Systems (LPS) emergency response and proposed additional
tenancy management resources, arising from new duties under the Building Safety
Act 2022 and Social Housing (Regulation) Act 2023 as well as variances within
specific service areas, details of which are provided below. An overspend in
the HRA will result in a contribution from general reserves at year end, if it
cannot be managed down.
HRA Risks
5.2
The HRA is entering into a period of significant uncertainty regarding
the financial position, there are major risks that need to be addressed and
monitored to ensure that the position remains stable. These risks include but
are not limited to:
·
Health
& Safety compliance
· Building Safety
compliance
· Disrepair claims
· Rent arrears and
collection rate
·
Financing
costs relating to borrowing investment in existing stock
5.3
The HRA will continue to review spend to try to maintain the current financial
position. Any variations will be reported to future Cabinet
meetings.
6
Dedicated Schools Grant Performance (Appendix 4)
6.1
The Dedicated Schools Grant (DSG) is a
ring-fenced grant within the General Fund which can only be used to fund
expenditure on the Schools’ Budget. The Schools Budget includes elements for a
range of services provided on an authority-wide basis including Early Years
education provided by the Private, Voluntary and Independent (PVI) sector, and
the Individual Schools Budget (ISB) which is divided into a budget share for
each maintained school. The forecast outturn is currently an overspend of £1.158m
and more details are provided in Appendix 4. Under the Schools Finance
Regulations any underspend or overspend must be carried forward within the
Schools’ Budget in future years.
7
NHS Managed S75 Partnership Performance
(Appendix 4)
7.1
The NHS Trust-managed Section 75 Services
represent those services for which local NHS Trusts act as the Host Provider
under Section 75 Agreements. Services are managed by Sussex Partnership
Foundation Trust (SPFT) and include health and social care services for Adult
Mental Health and Memory and Cognitive Support Services. The provisional
outturn is an overspend of £1.735m and more details are provided in Appendix 4.
8
Capital Programme Performance and Changes
8.1
The table below provides a summary of capital
programme performance by Directorate and shows that there is an overall underspend
of £1.296m which is detailed in Appendix 6.
|
Forecast
Variance Month 5
|
|
Reported
Budget Month 7
|
Provisional
Outturn Month 7
|
Provisional
Variance Month 7
|
Provisional
Variance Month 7
|
|
£'000
|
Directorate
|
£'000
|
£'000
|
£'000
|
%
|
|
0
|
Families, Children & Learning
|
15,477
|
15,477
|
0
|
0.0%
|
|
290
|
Housing, Care & Wellbeing
|
6,920
|
7,110
|
190
|
2.7%
|
|
0
|
City Services
|
59,721
|
59,721
|
0
|
0.0%
|
|
2,080
|
Housing Revenue Account
|
80,626
|
79,140
|
(1,486)
|
-1.8%
|
|
0
|
Corporate Services
|
7,814
|
7,814
|
0
|
0.0%
|
|
2,370
|
Total Capital
|
170,558
|
169,262
|
(1,296)
|
-0.8%
|
(Note: Summary may include minor rounding differences to Appendix 6)
8.2
Appendix 6 shows the changes to the 2024/25
capital budget. Cabinet’s approval for these changes is required under the
council’s Financial Regulations. The following table shows the movement in the
capital budget since approval at Month 5. There are no new schemes for approval
this month.
|
Summary of Capital Budget
Movement
|
Reported
Budget Month 7
|
|
|
£'000
|
|
Budget approved as at TBM
month 5
|
204,598
|
|
Changes reported at other
committees and already approved
|
3,000
|
|
New schemes
|
0
|
|
Variations to budget (for
approval – Appendix 6)
|
(340)
|
|
Reprofiling of budget to
later years (for approval – Appendix 6)
|
(35,757)
|
|
Slippage (for noting only)
|
(943)
|
|
Total Capital
|
170,558
|
8.3
Appendix 6 also details any slippage into next
year. At this stage project managers have forecast that £0.943m of the capital
budget will slip into the next financial year.
9.1
The council’s MTFS sets out resource assumptions
and projections over a longer term. It is periodically updated including a
major annual update which is included in the annual revenue budget report to
full Council. This section highlights any potential implications for the
current MTFS arising from the 2024/25 financial year and details any changes to
financial risks together with any impact on associated risk provisions,
reserves and contingencies. Details of Capital Receipts and Collection Fund
performance are also given below because of their potential impact on future
resources.
Capital Receipts Performance
9.2
Capital receipts are used to support the capital programme. Any changes
to the level of receipts during the year will impact on future years’ capital
programmes and may impact on the level of future investment for corporate funds
and projects such as the Strategic Investment Fund, Modernisation Fund, Asset
Management Fund and the Information, Technology and Digital Investment Fund.
The planned profile of capital receipts for 2024/25, as at Month 07, is
£15.693m which includes receipts expected for Montague Place, Land at Mile Oak,
a major industrial lease extension and the land site disposals at Moulsecoomb
relating to the housing project. There are also a number of residential and
commercial properties identified for disposal as reported within the
Residential Property Strategy report and Commercial Investment Property
Strategy report to committee in December 2023 as well as the disposals approved
by Cabinet on 27 June 2024.
9.3
To date there have been receipts of £1.551m in relation to the sale of
land at Portland Road, 61 Park Street, 43 Shirley Street, 39a George Street, 23
Upper Lodges Ditchling Road and some minor lease extensions and loan
repayments. The capital receipts performance will be monitored over the
remainder of the year against capital commitments.
9.4
The forecast for the ‘right to buy sales’ in 2024/25 (after allowable
costs and repayment of housing debt) is that an estimated 20 homes will be sold.
It is anticipated that a net retained receipt of up to £1.000m available to
re-invest in replacement homes, the flexibility that was allowed by an
amendment to the RTB policy allowing the council to retain the treasury share
for two years from 2022/23 for two years has now come to an end, reducing the
net capital receipt available during 2024/25. In addition to this net retained
receipt the HRA will also retain circa £0.540m to fund investment in the HRA
capital programme, specifically the new supply of affordable housing. To date
10 homes have been sold in 2024/25.
Collection Fund Performance
9.5
The Collection Fund is a separate account for
transactions in relation to council tax and business rates. Any deficit or
surplus forecast on the collection fund relating to council tax is distributed
between the council, Sussex Police & Crime Commissioner and East Sussex
Fire Authority, whereas any forecast deficit or surplus relating to business
rates is shared between the council, East Sussex Fire Authority and the
government.
9.6
The council tax collection fund is forecasting an overall deficit
position of £2.606m, of which the council’s share is £2.204m. The main drivers
for this deficit are a reduction in the ultimate collection rate of 0.5% (£1.010m),
increased council tax reduction (CTR) claimant numbers (£0.636m), increased
Severely Mentally Impaired (SMI) backdated exemption forecast cost (£0.691m)
and backdated student exemption cost (£0.707m). Partially offsetting these
increased costs is the increased empty property premium income and net banding
increases.
9.7
The business rates collection fund forecast
remains as an overall deficit position of £2.306m which relates entirely to the
brought forward position arising from higher appeals costs. The council share
of this deficit position after allowing for section 31 compensation grants is
£0.935m. There has been further clearance this financial year of outstanding
appeals against the 2017 valuation list including some large value successful
appeals backdated to 2017/18 with five supermarket assessments alone resulting
in a reduction in business rates income of £1.830m. The forecast is currently
assuming that these higher than anticipated levels of successful appeals
against the 2017 list can be managed within the overall provision for both the
2017 and 2023 lists at 31 March 2025. In addition to the appeals provision
there are a range of other risks that could change this forecast significantly
with the main uncertain factors being business failures and any step increase
in empty properties.
Reserves, Budget Transfers and
Commitments
9.8
The creation or re-designation of reserves, the
approval of budget transfers (virements) of over £1 million, and agreement to
new financial commitments of corporate financial significance require Cabinet
approval in accordance with the council’s Financial Regulations and Standard
Financial Procedures. There are no items requiring approval at this stage.
10
Treasury Management Mid-Year Review
10.1 The 2024/25 Treasury Management Strategy, including the Annual
Investment Strategy was approved by full Council on 22 February 2024.
10.2 The CIPFA Treasury Management Code requires the performance of the
treasury management activity against the strategy and key prudential and
treasury indicators to be reported at least twice a year. This was previously
presented to Strategy, Finance and City Regeneration Committee as separate
reports in July and December of each year and will now be reported to Cabinet
as part of the TBM process.
10.3 The treasury management activity for the first half of 2024/25 is
provided in Appendix 7. The main points are:
·
The
council did not enter into any new long term borrowing in the first 6 months of
2024/25;
·
The
council has £4.000m of new short term borrowing as at 30th September
2024;
·
The
highest risk indicator during the period was 0.006% which is below the maximum
benchmark of 0.050%;
·
The
return on investments has exceeded the target benchmark rate in the first 6
months of 2024/25 by 0.09%
·
The
two borrowing limits approved by full Council have not been exceeded, and;
·
The
Annual Investment Strategy parameters have been met throughout the 6-month
period.
11
Analysis and consideration of alternative
options
12
Community engagement and consultation
12.1 No specific consultation has been undertaken in relation to this
report.
13
Financial implications
13.1 The financial implications are covered in the main body of the
report. Financial performance is kept under review on a monthly basis by the Corporate
Leadership Team and members and the management and treatment of strategic
financial risks is considered by the Audit, Standards & General Purposes
Committee.
Finance Officer
consulted: Jeff Coates Date: 21/11/2024
14.1 Decisions taken in relation to the budget must enable the council to
meet its legal duty to achieve best value by securing continuous improvement in
the way in which its functions are exercised, having regard to a combination of
economy, efficiency and effectiveness. The council must also comply with its
general fiduciary duties to its Council Tax-payers by acting with financial
prudence, and bear in mind the reserve powers of the Secretary of State under
the Local Government Act 1999 to limit Council Tax & precepts.
14.2 The Treasury Management actions reported in the review document at
Appendix 7 are carried out in accordance with the powers conferred by Part 1 of
the Local Government Act 2003, which permit local authorities to invest for the
purposes of the prudent management of their financial affairs. Regard must be
had to statutory guidance in the form of the Prudential Code for Capital
Finance in Local Authorities issued by the Chartered Institute of Public
Finance and Accountancy. The Council’s approach is considered to be consistent
with that Code and the requirements of the Act.
Lawyer
consulted: Elizabeth Culbert Date: 22.11.24
15.1 There are no direct equalities implications arising from this
report.
17
Health and Wellbeing Implications:
17.1 The council’s budget includes many statutory and preventative
services aimed at supporting vulnerable children and adults. The budget
prioritises support to these core and critical services including management of
any emerging in-year pressures to minimise impacts on statutory provision.
18.1 The
forecast overspend risk of £6.808m at Month 7 represents 2.6% of the net
General Fund budget. While this is a continuation of the downward trend from
Month 5, it is a relatively high risk position at this stage of the year.
Recruitment and spending controls introduced in early October (as set out in
the Month 5 report to October Cabinet) should enable this to be addressed but
will need to be monitored closely given the reducing number of months available
to correct the position.
18.2 The
Month 5 report also noted that if the position did not significantly improve,
an officer Star Chamber approach to review all spend over £1,000 would be put
in place. This is now being instigated. The Star Chamber clearly cannot review
every item of spend but will ensure that there are either appropriate
mechanisms (e.g. specific review panels) in place to review spend and/or issue
instructions on specific categories of spend.
Supporting
Documentation
Appendices
1.
Financial
Dashboard Summary
2.
Revenue
Budget Movement Since Month 5
3.
Revenue
Budget Performance RAG Rating
4.
Revenue
Budget Performance
5.
Summary
of 2024/25 Savings Progress
6.
Capital
Programme Performance
7.
Treasury
Management Mid-Year Review
