The Interim Director of Finance and Resources presented the Finance and Performance Monitoring Report – Quarter 1 2023/24.
Members were advised that the report detailed the following Council positions in the first quarter of the 2023/24 financial year:
· the Council’s forecast outturn revenue position for the year,
· an update on the Council’s capital programme for the year,
· the procurement pipeline, and
· the organisation’s performance measures against its strategic priorities.
From a revenue perspective, the Council had a £10.7 million budget for 2023/24 which was approved by Council in February 2023. Overall, the Council was currently forecasting a revenue overspend against the first quarter budget totalling £139,000. This was due to the anticipated 2023/24 pay award, which was yet to be ratified. If this was extrapolated upwards for the full year, it was anticipated that the Council would overspend in the region of £557,000.
It was estimated that utilities increases were running at 70 per cent but in the 2023/24 budget a 100 per cent increase in budget was assumed and a reserve was set up for the same amount. Given the forecast overspend linked to the anticipated 2023/24 pay award and that the Council had not experienced the increases in utility costs anticipated, it was proposed that £557,000 of the utilities reserve for 2023/4 should be released to offset the overspend position. This pay issue would need to be addressed in the 2024/5 budget which would leave the utilities reserve for 2024/5 and 2025/6 untouched.
There was a small underspend of £4,114 against the £100,000 grants to voluntary bodies budget. The report requested approval to allocate the underspend to the Citizens Advice Bureau (CAB) Redditch branch to gain a physical presence back in Redditch and enable residents to access face to face appointments.
From a capital perspective, the Council had a capital programme of £12.6 million which was approved in the budget in February 2023. Of this, £10.6 million was externally funded whilst £2.0 million was Council funded. As noted from the Financial Outturn 2022/23 report, there was £3.292 million budget slippage from 2022/23 which would be added to this budget. At Quarter 1, the actual spend against the original 2023/24 capital budget was £583,000.
There were a number of capital programme changes detailed in the report including:
· reprofiling of Ipsley Church Lane cemetery budget from 2023/24 to 2024/25,
· increased fleet replacement costs totalling £611,000,
· the leisure changing places budget totalling £21,750 to provide a state of the art toilet facility for visitors to Redditch town centre.
As approved by Executive in July 2023, a list of procurements estimated at a value of over £200,000, and which were delegated for approval to the Executive Committee or to Officers over the following year, were detailed in Appendix D. Whilst Appendix E detailed all procurement estimated at a value of between £50,000-£200,000. Appendix F of the report detailed procurement that impacted on Redditch but which was procured by Bromsgrove district Council due to the shared nature of some of the Councils’ services.
At Quarter 1 on the HRA, it was anticipated that there would be budget underspends against repairs and maintenance and supervision and management due to vacancies in some parts of the service. This resulted in an overall projected surplus on services totalling £488,000, which would be contributed to HRA reserves. In addition to this, there was currently a £100,000 projected underspend against the £11.725 million capital programme.
Following the presentation of the report, a number of points were discussed in detail:
· The slippage of the budget for Ipsley church Lane Cemetery to 2024/25 and the extent to which this meant that there would be a delay to the works at the site. Members were advised that there had been a delay in respect of the planning process and Officers agreed to provide further clarification as to whether this would result in delays for the introduction of the cemetery.
· The budgets held in reserves and the changes arising to the council’s reserves following a review in January 2023. Officers explained that the review had been conducted as a number of reserves had not been spent for many years.
· The inclusion of Covid reserves in the Council’s budget. Members were advised that some of this funding remained unspent and there was some uncertainty as to whether the government would r4equire this to be returned.
· The utilities reserve, which had been incorporated into the Medium Term Financial Plan when it was agreed in February 2023, as inflation rates had been significantly higher at that time. The council would need to review this reserve moving forward and whether it needed to be retained.
· The situation with regards to empty retail units in the town, which Members commented had deteriorated further since the report was published.
· The increase in homelessness figures and those in crisis within housing in the Borough, which was in line with national trends. Members were asked to note that the term “crisis”, as detailed in the report, referred to residents who were experiencing a housing crisis, rather than suggesting that the council was in crisis.
· The impact of increasing rental fees at a time when median earnings for Redditch residents had reportedly fallen by £4,500 per annum.
During consideration of this item, reference was made to the recommendations on this subject that had been made at a meeting of the Budget Scrutiny working Group when the report had been pre-scrutinised. Members noted that the recommended action would add value and therefore these recommendations were accepted.
1) the current overspend position in relation to Revenue and Capital Budgets for the period April to June and the full year overspend position of £557,000 be noted;
2) those procurements over £200,000 due to be delivered during 2023/4 be added to the forward plan;
3) the Quarter 1 Performance data for the Period April to June 2023 be noted;
4) a review of how the Council secures external grants and trust funding to be undertaken at the end of this financial year;
5) a review all grant spending commitments to be undertaken as a matter of urgency, to include considering risk relating to inflation and the Local Authority’s overspend this year;
RECOMMENDED to Council
6) allocating £557,000 from the Utilities Reserve to mitigate the overspend position in 2023/4;
7) changes to the Capital Programme with an ongoing revenue cost of £101,000, £2,000 Leisure Changing Places and £99,000 Fleet replacement;
8) approving the £18,200 increase to the Engineering Services base budget from the General Fund and £4,900 increase from the HRA in 2023/4 from reserves and including this change in the 2024/25 Medium Term Financial Plan;
9) approving the £23,000 increase to the Bereavement Services base budget in 2023/4 from reserves and including this change in the 2024/25 Medium Term Financial Plan;
10) that the underspend of £4,114 from the Grants to Voluntary Bodies scheme be allocated to Citizens Advice Bureau Redditch and Bromsgrove to fund the costs of room hire to enable residents to access face to face appointments.
(During the consideration of this item, Members discussed matters that necessitated the disclosure of exempt information. It was therefore agreed to move to exclude the press and public prior to any debate on the grounds that information would be revealed relating to the financial and business affairs of any particular person (including the authority holding that information) and information relating to consultations and negotiations, including contemplated consultations and negotiations, in respect of labour relations matters. However, there is no exempt information in this record of the debate).