Subject: Targeted
Budget Management (TBM) 2024/25 Month 9 (December)
Date of meeting: Thursday, 13
February 2025
Report of: Cabinet
Member for Finance & City Regeneration
Contact Officer: Name:
Nigel Manvell, S151 Chief Financial
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 9
on the council’s revenue and capital budgets for the financial year 2024/25.
1.2
The forecast outturn risk for 2024/25 at this
stage is a £3.310m overspend on the General Fund revenue budget representing 1.3%
of the net budget and approximately 0.7% of the gross budget. This includes a
forecast overspend risk of £1.522m on the NHS managed Section 75 services.
1.3
The report also includes monitoring of savings programmes which are also
shown to be at risk with the report indicating that £4.777m (20%) of the very substantial
savings package in 2024/25 of £23.627m is potentially at risk.
1.4
The forecast indicates a significant improvement of £3.498m since the
Month 7 forecast but a forecast overspend risk remains. 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.
1.5
It should be noted that the council has recently restructured its
directorates and senior management structure to make significant savings. The
new structure was implemented on 1 January and therefore this report is in the
old format but all future reports will be reported under the new structure.
2
Recommendations
2.1
Cabinet notes the forecast risk position for the General Fund, which
indicates a potential forecast overspend risk of £3.310m.
2.2
Cabinet notes the forecast outturn includes a forecast overspend risk of
£1.522m 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 £1.276m.
2.5
Cabinet notes the forecast position on the Capital Programme which is an
underspend variance of £2.188m.
2.7
Cabinet approves new capital schemes requested in Appendix 7.
2.8
Cabinet notes the Treasury Management update as set out in Appendix 8.
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 S151 Chief Financial 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 7
|
|
Month 9
|
Month 9
|
Month 9
|
Month 9
|
|
£'000
|
Directorate
|
£'000
|
£'000
|
£'000
|
%
|
|
(588)
|
Families,
Children & Learning
|
69,833
|
68,892
|
(941)
|
-1.3%
|
|
4,542
|
Housing,
Care & Wellbeing
|
126,138
|
128,642
|
2,504
|
2.0%
|
|
1,205
|
City
Services
|
46,870
|
46,909
|
39
|
0.1%
|
|
119
|
Corporate
Services
|
34,900
|
34,440
|
(460)
|
-1.3%
|
|
5,278
|
Sub
Total
|
277,741
|
278,883
|
1,142
|
0.4%
|
|
1,530
|
Centrally-held
Budgets
|
(19,844)
|
(17,676)
|
2,168
|
10.9%
|
|
6,808
|
Total
General Fund
|
257,897
|
261,207
|
3,310
|
1.3%
|
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.
Demand-led
Budgets
|
Forecast
|
|
2024/25
|
Forecast
|
Forecast
|
Forecast
|
|
Variance
|
|
Budget
|
Outturn
|
Variance
|
Variance
|
|
Month 7
|
|
Month 9
|
Month 9
|
Month 9
|
Month 9
|
|
£'000
|
Demand-led
Budget
|
£'000
|
£'000
|
£'000
|
%
|
|
(1,439)
|
Child
Agency & In House Placements
|
27,575
|
25,990
|
(1,585)
|
-5.7%
|
|
2,089
|
Community
Care
|
79,271
|
79,875
|
604
|
0.8%
|
|
2,548
|
Temporary
Accommodation
|
6,418
|
8,953
|
2,535
|
39.5%
|
|
3,198
|
Total
Demand-led Budget
|
113,264
|
114,818
|
1,554
|
1.4%
|
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 a significant cost pressure of £0.730m on Home to School transport.
This, together with underspends on Children’s Placements of (£1.585m) and other
underspends of (£0.086m), results in a forecast underspend of (£0.941m) as at
Month 9. 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.
Schools’ Budgets
For 2024/25 there were 31
schools requiring Licensed Deficits which totalled £7.5 million. In July the council’s
Chief Financial Officer (CFO) and the Corporate Director of Families, Children &
Learning agreed compliant licensed deficits totalling £6.5m. With net School
Surplus Balances of only £0.281m there are insufficient balances to license
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 balance within 5 years and these deficits total c. £1m and remain
unapproved with further discussions taking place.
The forecast for the 2024/25
central Dedicated Schools Grant is an overspend of £1.276m. 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. This means
there is an in-year overspend of £2.551m. The DSG position is described in more
detail in section 5 below.
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 Health & Adult Social Care 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 service
has an ongoing 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.
Housing
Services and Temporary Accommodation (TA): As
previously reported, since December 2023 there has been a steady
increase in demand. 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 temporary accommodation
service is forecast to overspend by £2.612m and £1.146m of savings are at risk
of not being met. The overspend is partially offset by financial recovery
measures of £0.050m.
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. As a broad overview, these
actions can be categorised as Prevention, Move-on’s to sustainable
accommodation, cost reduction measures, and increasing income through improved
collection and reducing void turnaround times.
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 currently relates
to the following elements:
Emergency nightly booked
(Spot Purchased) accommodation is forecast to overspend by £2.006m. 402
households were housed in nightly booked accommodation which is 242 higher than
budgets allow and the forecast assumes this will increase to 415 by the end of
March 2025. Additionally, the price of nightly booked accommodation has seen a
steep increase of around 10% 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 market disruption has been caused by cumulative events including increases
in landlord taxes, increased mortgage rates, and threats of impending
legislation. This has a double impact on homelessness. ‘End of Private Rental’
is the main reason for homelessness, but in the last two reporting quarters,
this has increased from 34% of all new cases to 61%. The Private Rented Sector
is also the greatest means of preventing homelessness.
Booked Accommodation: This
budget is forecast to overspend by £0.696m. The budget assumed that there would
be an average of 261 units of block booked accommodation for the year 2024/25.
The forecast assumes 365 properties including an additional 25 units recently
acquired to offset the high costs of spot purchase and to offset the loss of
private sector leased accommodation. The forecast assumes this level will
remain for the remainder of the year due to the current level of demand on the
service and the limited opportunities for move on to social housing and the
private rented sector.
Private Sector Leased (PSL)
TA budget is forecast to underspend by (£0.228m). Generally, PSL’s are the
best form of TA, both in in terms of cost and quality. In 2023/24 the number of
landlords exiting this market, contributed to a 7% reduction in PSL properties.
So far in 2024/25, there has been a further reduction of 48 properties with
many property renewal contracts still in negotiation. This forecast assumes PSL
TA properties will reduce by a total of 66 properties this year. This is based
on prior year trends but also the number of leases (over 50% of stock) coming
to an end this financial year. The downward trend has slowed as the service has
been successful over recent months enabling more leases to be renegotiated.
There is also a marketing campaign underway to make potential landlords aware
of the benefits of leasing to the council.
The
service is continuing to look for measures to reduce the number of households
accommodated, looking for innovative and different methods of provision and
move-on options as part of the TA Reduction Action Plan, the broad themes of
which have been set out above. The service is also aiming to make greater use
of empty council housing stock on a short-term basis.
Directorate activities and
services were heavily impacted by COVID-19 in previous years and the services
are starting to see a steady return, in line with city recovery. The savings
targets can only be achieved if demand exceeds pre-2019 levels for key income
areas such as paid parking, commercial activities and Planning & Building
Control fee incomes. In-year pressures are being mitigated by reductions in
supplies & services and holding vacant posts to reduce staffing costs, but
this directly affects service delivery and has a visible impact on the city.
City Services has been working
on financial recovery plans and measures to mitigate the forecasted overspends
which has resulted in an improvement of £1.166m from month 7 bringing the
forecast overspend down to £0.039m. This includes the pressure of £0.600m
relating to amounts payable under the Royal Pavilion Museums Trust agreement
toward the 2024/25 pay award and pressures identified in City Environmental
Management services resulting in a £0.511m worsened position. Offsetting these
pressures is a significant movement in the forecast for Transport which has
seen a £1.394m improvement from Month 7.
4.9
Centrally-held Budgets: There
is a forecast overspend of £3.168m on centrally-held budgets. Of this £1.365m
relates to the estimated additional cost of the 2024/25 pay award in excess of
the amount provided for 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 £1.039m on the Housing Benefit Subsidy budget. The main element of this is a
pressure of £0.840m 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. There is
also a pressure of £0.179m on the net position of the recovery of overpayments.
The corporate ‘Organisational
Redesign’ saving of £2.475m is also held in this area. The redesign has now
been completed and the new organisational structure came into force on 1
January 2025. As noted previously, an additional vacancy target was applied
council-wide, generating savings of £1.271m to recognise the lead-in time to
implement the redesign. A risk provision of £1.000m was also set aside to
mitigate this risk and these two measures substantially cover the savings
target.
There is a forecast underspend
of £0.747m 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
4.10 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.
4.11 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 9 and shows that
gross savings of £19.178m have been achieved but that inflationary pressures
(exceptional price increases) have reduced this by £0.328m. Including other
unachievable savings of £4.449m, this means that a total of £4.777m (20%) 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 £0.229m 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, as well as variances within
specific service areas, details of which are provided below. Any 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
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 £1.276m
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 £1.522m 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 £2.188m which is detailed in Appendix 6.
|
Forecast
Variance Month 7
|
|
Reported
Budget Month 9
|
Provisional
Outturn Month 9
|
Provisional
Variance Month 9
|
Provisional
Variance Month 9
|
|
£'000
|
Directorate
|
£'000
|
£'000
|
£'000
|
%
|
|
0
|
Families, Children & Learning
|
15,935
|
15,935
|
0
|
0.0%
|
|
190
|
Housing, Care & Wellbeing
|
6,696
|
6,789
|
93
|
1.4%
|
|
0
|
City Services
|
55,149
|
55,149
|
0
|
0.0%
|
|
(1,486)
|
Housing Revenue Account
|
78,606
|
76,325
|
(2,281)
|
-2.9%
|
|
0
|
Corporate Services
|
7,214
|
7,214
|
0
|
0.0%
|
|
(1,296)
|
Total Capital
|
163,600
|
161,412
|
(2,188)
|
-1.3%
|
(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 7.
|
Summary of Capital Budget
Movement
|
Reported
Budget Month 9
|
|
|
£'000
|
|
Budget approved as at TBM
month 7
|
170,558
|
|
Changes reported at other
committees and already approved
|
0
|
|
New schemes (for approval
– Appendix 7)
|
198
|
|
Variations to budget (for
approval – Appendix 6)
|
2,737
|
|
Reprofiling of budget to
later years (for approval – Appendix 6)
|
(8,293)
|
|
Slippage (for noting only)
|
(1,600)
|
|
Total Capital
|
163,600
|
8.3
Appendix 6 also details any slippage into next
year. At this stage project managers have forecast that £1.6m 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 9, is £12.736m
which includes receipts expected for 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 £1.968m in relation to the sale of
land at Portland Road, 61 Park Street, 43 Shirley Street, 39a George Street, 23
Upper Lodges Ditchling Road, 2 Varndean Cottages 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
12 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% (£1.012m),
increased council tax reduction (CTR) claimant numbers (£0.640m), increased
Severely Mentally Impaired (SMI) backdated exemption forecast cost (£0.725m)
and backdated student exemption cost (£0.889m). 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. Although the forecast for the current year is to break even there are
some large movements within this. The main areas for increased costs are higher
than anticipated cost from appeals against the 2017 rating list of £3.914m and
higher empty relief awarded of £1.013m. There has been a significant increase
in the liability from a backdated increase to the rateable value of a single
assessment amounting to £4.836m.
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 Update
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.
·
The
council entered into £25.000m of PWLB borrowing in December 2024 at an interest
rate of 4.69% to support the HRA Capital Programme delivery and repay internal
borrowing from the General Fund. This was undertaken for the period of one
year, when it is expected to be refinanced at lower interest rates. No other
long-term borrowing was entered into during the period;
·
The
council held £5.500m of new short term borrowing as at 31 December 2024. This was
required to meet short-term cash requirements at the end of the month;
·
The
highest risk indicator during the period was 0.003% which is below the maximum
benchmark of 0.050%;
·
The
return on investments has exceeded the target benchmark rate in the period of
Oct-Dec 2024 by 0.08%
·
The
two borrowing limits approved by full Council have not been exceeded, and;
·
The
Annual Investment Strategy parameters have been met throughout the 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: 23/01/2025
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 8 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: 24/01/2025
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 £3.310m at Month 9 represents 1.3% 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 7
3.
Revenue
Budget Performance RAG Rating
4.
Revenue
Budget Performance
5.
Summary
of 2024/25 Savings Progress
6.
Capital
Programme Performance
7.
New
Capital Schemes
8.
Treasury
Management Update
