Agenda item

Finance, Performance and Risk Report - Quarter 1 2023/24

To consider the attached reports.

Minutes:

The following reports were presented as a single item and considered as a combined report: -

 

      i.        Corporate Overview and Scrutiny Committee Performance, Risk and Financial Monitoring (Quarter 1) Report 2023-24

    ii.        Corporate Performance Monitoring Report (Scorecard) Quarter 1 2023-24

   iii.        Strategic Risk Monitoring Report Quarter 1 2023-24

   iv.        Finance Performance and Risk Meeting Performance Report Quarter 1 2023/24 (Corporate Resources)

 

To view the detail of the reports, please refer to the link published on the County Council website at the link here.

 

Paul Blacker, Director of Finance, introduced the item with an overview of the current Revenue Forecast Outturn Position 2023/24. The following points were highlighted in reports circulated in advance of the meeting: -

 

      i.        The current forecast for the year end revenue position showed a balanced position against the revenue budget of £567.133 million, based on forecasts made in July 2023.

 

    ii.        The largest variances identified at the time of the meeting included a £4.970 million forecast overspend in the Children and Families Budget. The overspend to be offset by the £4.557 million underspend in the Economy, Environment & Infrastructure Budget and a £1.507 million underspend in Technical & Countywide Budgets.

 

   iii.        National negotiations continued to seek 2023/24 Green Book pay awards. Current budgets and forecasts included an allowance of 4.5% to offset this, subject to the potential risk that the final agreement could result in a larger increase. Any excess to be managed through General Fund reserves.

 

   iv.        On 21 June 2023, Cabinet approved a carry forward of £1.748 million from the COVID emergency grant to fund ongoing commitments associated with the recovery from the pandemic. The full amount of the carry forward was reflected in the current forecast.

 

    v.        Referencing delivery of the Council’s Savings Programme, it was reported that at the end of Quarter 1, £11.796 million savings had been achieved, representing 55.9% of the annual target, with a further £4.280 million savings forecast to be delivered against a target of £21.101 million.

 

   vi.        A total of £5.026 million was forecast to be at risk of being delivered by the end of 2023/24, representing 23.82% of the annual target. The most significant elements considered to be at risk included £3.895 million Adult Social Care Savings, £200k income targets across Economy, Environment & Infrastructure budgets and £604k income targets across Corporate Resources and Technical & Countywide budgets.

 

  vii.        The current capital budget for 2023/24 was reported at £156.567 million. Actual spend against the capital programme at the end of June was reported at £21.532 million.

 

 viii.        The forecast outturn position for 2023/24, based on forecasts set out in July 2023, (Period 4), was forecast at £156.524 million against a budget of £156.567 million. This reflected a forecast in-year underspend of £43k.

 

   ix.        All service areas were forecast to spend within £250k of current budgets.

 

    x.        A recommended increase in the capital budget was proposed to Cabinet at £1.582 million. Details of the increases are set out in the Performance, Risk and Financial Monitoring (Quarter 1) Report and can be viewed at the link here.

 

   xi.        At the time of the meeting, the capital spend for Quarter 1 reflected a reduced figure for 2023/24. It was explained that this was due to slippage on the capital programme in 2022/23, and subsequent impact on future years.

 

  xii.        Less capital spend was anticipated from funding borrowed in 2023/24. This was due to slippage in schemes funded from borrowing required to address the volatile nature of capital spend.

 

Questions:

 

Several members of the committee expressed concern about the forecast overspend in the Children and Families Budget and asked how this would be managed going forward.

 

It was noted that increased energy costs had impacted on the council’s spending. However, income generated from waste diverted from landfill had remained fairly consistent over the past year and could be used to offset energy costs. Other waste measures were also performing well with 52.5% of household waste being sent for recycling, reuse or composting. Current forecasts demonstrated the lowest level of residual waste per household since first reported in 2011.

 

Expanding on the impact of income generated from waste, it was explained that waste tonnages were currently forecast at the levels forecast for the 2022/23 financial year, and therefore lower than originally forecast. This was reflected in a forecast £540k underspend against recycling credit payments and £60k underspend against bulking and haulage costs. Actual tonnages continued to be monitored closely and updated accordingly.

 

Noting a higher than anticipated £1.9 million forecast of income generated by the energy from waste facility and £1.7 million forecast underspend from a combination of lower volumes of waste being processed in year and higher third-party fee income evidenced by the 2022/23 outturn, members reflected on the significant influence waste generated income was having on the council’s budget.

 

Responding to a request for more detail on ‘waste’ performance indicators, it was agreed that a briefing note would be circulated to the Corporate Overview and Scrutiny Committee after the meeting. In addition, it was suggested that the Environment Scrutiny Committee should be asked to consider the performance indicators in more depth with regular updates at future committee meetings. This would be supplemented by periodical reports back to this committee. Action by – Corporate Finance Team

 

Acknowledging concerns about the forecast overspend in the Children and Families Budget, it was agreed that delivery of this service area was an area of significant risk and uncertainty. Refuting suggestions that the council budget might have been set with unachievable targets, Steve Mawson, Deputy Chief Executive and Executive Director of Corporate Resources, reassured members that, despite the volatility in some budget areas, the use of general reserves and careful monitoring would help achieve an overall balanced budget in the long-term. The Deputy Chief Executive expressed his disappointment that, whilst the councils financial performance had appeared encouraging during the early part of the financial year, this had declined in recent months.   

 

It was agreed that the cost of living crisis and changes in the county’s demographics were key influences in achieving a balanced budget. Ongoing pressures from the delivery of adult social care services, both nationally and in the county, were also key determinants.

 

Paul Blacker, Director of Finance, informed members that when producing the council budget, it was important to consider the budget as a whole and to plan for several contingencies, including any impact from inflation. It was agreed it was important for members to consider the budget from a corporate perspective rather focusing on specific areas.

 

Allowing sufficient time for stability, it was anticipated that the council’s year end revenue budget for 2023/24 would achieve a balanced position.

 

Specific actions and requests for information at the meeting included: -

 

      i.        That the Children and Families Scrutiny Committee consider performance indicators on school absenteeism and exclusions

 

    ii.        That road traffic accident and community safety continue to be closely monitored

 

Welcoming the new approach to considering performance and risk reporting at the meeting, members noted the information and thanked officers for the detailed presentation.

Supporting documents: