The Head of Finance and Customer Services presented the Financial and Performance Monitoring Report for the third quarter of 2023/24.
The projected budget position for the Council, based on figures from Quarter 3 of the financial year, would be £750,000. This represented a £381,000 increase on the £369,000 overspend that had been reported for the end of Quarter 2 and was largely caused by the allocation of a £1,925 pay award to staff, which had been paid in December 2022. In addition to this, there had been increased fuel and fleet maintenance costs during the period.
The Council’s budget position would continue to be reviewed; however, this in-year budget forecast reflected the best information available at the time. Members were advised that it was important to note that there were a number of key factors that might impact upon the financial position which were not yet reflected fully within the forecast, including:
· The cost of living crisis and the impact that this might have upon demand for Council services, including the impact of homelessness and bed and breakfast temporary accommodation costs.
· Inflationary increases – general inflation had been running at 10 per cent and would impact upon transport costs, utilities and contracts in particular.
· Ensuring all invoicing was up to date – especially as the Council moved closer to the end of the financial year at the end of March 2023.
A capital programme of £4.1 million had been approved in the Medium Term Financial Plan (MTFP) for 2022/23 in March 2022. This had been fully reviewed as part of the MTFP using actual data as at the end of December 2022. Many of the schemes in the capital programme were already in partial delivery in the 2022/23 financial year. The capital programme included the sums not spent in 2022/23 (and 2021/22 by default if schemes originated earlier than 2022/23, as sums had been carried forward from the previous year’s final MTFP) to be carried forward into 2023/24.
The budget included Town’s Fund grant funding schemes, such as the Digital Manufacturing and Innovation Centre, improvements to the Town Centre Public Realm and the business case for the Library site, subject to approval of the latter scheme. There was also £294,000 in UK Shared Prosperity Funding (UKSPF). Expenditure at Quarter 3 of the 2022/23 financial year was at £1.88 million against the overall 2022/23 capital budget totalling £5.4 million.
A review of the Council’s reserves position had been undertaken as part of the MTFP process. At Quarter 2, the General Fund had been impacted by the significant 2022/23 overspend position, which was £1.424 million. This was what was reflected in the MTFP. However, Quarter 3 monitoring set out a significant improvement of this position to a £750,000 overspend and therefore improved the General Fund position to a forecast £2.506 million at 31st March 2026.
The Executive Committee was being asked to approve implementation of the Council Tax Support Fund Policy for 2023/24. The Council was keen to support all eligible taxpayers within the authority’s boundaries and, as such, would implement the scheme strictly in accordance with Central Government Guidelines. A reduction of up to £25 would be made to the Council Tax Account of taxpayers who were in receipt of a Council Tax Reduction on 1st April 2023. The reduction in liability would apply to both working age and pension age Council Tax Reduction applicants. When any funds remained after applying for the reduction in liability, the Council would use the funds as part of its Exceptional Hardship Fund, which assisted low-income taxpayers facing exceptional financial hardship.
The Council was administering the Government’s Energy Bill Support Schemes. The Executive Committee was being asked to approve the release of £8,000 from General Fund Reserves to administer the Energy Fund Support Schemes if the Government did not grant New Burdens Funding to cover these costs. Members were advised that although it was highly likely that this funding would be made available, it would be prudent at this stage to plan for the worst-case scenario. Redditch Borough Council was distributing a £19,000 Alternative Fuel Payment Scheme and £250,000 for the Energy Bill Support Scheme Alternative Funding.
The Executive Committee was also being asked to approve amendments to the Dial a Ride and Shopmobility fees and charges. An amendment was highlighted as being necessary to paragraph 3.18 of the report in respect of this matter and Members were advised that this should have recorded the following:
“Officers have been in discussion with the Portfolio Holder for Community Services and Regulatory Services to trial a scheme to support residents in Beoley being able to access services in Redditch. The community transport scheme in Bromsgrove does not have capacity. As part of the trial it is proposed to charge an increased fee to take into account that the bus will have to travel outside of the Borough. The new fee proposed is as below and would only apply to residents on the border with Redditch. The community transport service in Bromsgrove is supportive of this trial. The new fee for Dial A Ride is:
‘Charge for residents outside the Borough’ - to be ‘£1 additional fee to existing charges’.”
An amendment was also requested to the Shopmobility fees and charges relating to ‘the assisted shopping escort service’ and to increase the charge from £2.50 to £12 an hour. This was to support the service to be closer to full cost recovery. The proposed fee was comparable to the Age UK hourly rate for assistance with shopping. The service was keen to promote this service, which historically had not been well advertised to customers.
The Housing Revenue Account (HRA) budget, totalling £25.4 million, was approved in March 2022 and funded from rents and tenants’ contributions. The approved HRA capital programme for 2022/23 totalled £14.2 million. As at Quarter 3 of 2022/23, it was forecast that the HRA would outturn with a surplus in the region of £56,000, which was a reduction of £85,000 on the £141,000 figure reported at Quarter2.
The main variances in the HRA that had contributed to this surplus included:
· Anticipated repairs and maintenance efficiency savings arising from improved work planning and timely delivery of works.
· Vacant posts due to ongoing operational reviews and reduced consultancy/professional fees.
· Increases in arrears especially from former tenants due to economic conditions prevailing and corresponding bad debt adjustments.
As at Quarter 3 of 2022/23, it was forecast that the HRA capital programme budget would outturn with a spend of £10.3 million against a £14.2 million budget. The £3.9 million underspend was primarily as a result of delays in project start dates and changes in assumptions regarding Housing purchases. This was a £200,000 improvement on the Quarter 2 HRA capital position.
The performance report set out to provide data and information that linked all activity back to the Council’s strategic purposes as set out in the Council Plan and Council Plan Addendum. It was recognised that effective performance management would enable the Council to use its limited resources in a more targeted manner, maximising the value of Council services and allowing the Council to be even more responsive to customers’ needs.
Members subsequently discussed the content of the report and in doing so questioned whether the proposed increase of £1 on the fee for customers who lived outside the Borough using the Dial A Ride service was sufficient. It was noted that this was being proposed in a context in which ongoing roadworks on the Birmingham Road were causing traffic delays and the suggestion was made that the increase could potentially have been higher. Officers suggested that this could be investigated further and it was noted that Members had the power to amend the charge further if considered necessary.
1) the current financial position in relation to Revenue and Capital Budgets for the period April to December 2022 be noted for both the Council and the HRA;
2) the Quarter 3 Performance data for the Period October to December 2022 be noted;
3) the updated Redditch Borough Council - Council Tax Support Fund Policy 2023-24 be approved;
4) £8,000 be approved to be released from General Fund Reserves to administer the Energy Fund Support Scheme if the Government did not Grant New Burdens Funding to cover these costs; and
5) the increases to Dial a Ride and Shopmobility charges be approved.