Agenda item

The Section 151 Officer presented the Combined Financial Outturn and Quarter 4 Revenue Monitoring Report 2023/24 (Including Update on the Fleet) for the Committee’s consideration.

During the presentation of this report, the following points were highlighted:

·             The Council was projected to have a £386,000 overspend at the end of the 2023/24 financial year, which was only £3,000 more than the figures that had been anticipated at the end of the third quarter.

·             A key reason for the overspend had been costs arising due to issues with the Council’s vehicle fleet.

·             Another major cause of the overspend had been the financial costs arising from the pay award to staff.

·             The Council’s long-term debt remained at a total of £104 million, which was due to the transfer into the Housing Revenue Account (HRA) 20 years previously.

·             The Council had not had to borrow funding for a long time, with purchases having been paid for in recent years using cash balances.  It was possible that this situation would need to change in order to fund purchases of replacement vehicles in the fleet.

·             The authority had only spent £3.2 million of the total £12 million capital budget.  This area would need to be reviewed going forward, although Members were asked to note that delays had been caused due to competition for raw materials and for contractors’ time.

·             The HRA budget was in a breakeven position, although there had been a slight overspend on the HRA capital budget.

·             Council Tax collection rates had recovered to a level almost equivalent to collection rates prior to the Covid pandemic.  Members were asked to note that, like many authorities in the country, there had been a decrease in collection rates during the pandemic.

·             There were four key areas where additional funding would be requested from Council:

-        Funding to purchase new vehicles for the fleet.  Previously, the Council had planned to maintain existing vehicles whilst waiting for clarity from the Government on future requirements of waste and recycling vehicles.  Electric, hybrid and hydrogen powered vehicles were all more expensive than diesel powered vehicles. However, guidance had not yet been issued by the Government on this subject and maintenance costs for the Council’s existing fleet had been higher than anticipated.  Therefore, Officers were proposing to start replacing some of the vehicles and this would require financial investment.

-        There had been a high-profile funeral held at Redditch crematorium in June 2024 which had been well attended by people in person and remotely.  Those watching the live stream of the funeral had highlighted problems with the audibility of the sound system.  Given the sensitivities associated with this service area, it was recognised that there was a need to invest in improvements to the sound system which were likely to cost circa £20,000.

-        Members of the Executive Committee were keen to introduce a street market.  This would be at a cost of an additional £38,000 per annum to the Council.

-        Similarly, members of the Executive Committee had requested a reduction in Dial a Ride fares, at a cost of £44,000 per annum.

·             There had been a surplus budget reported to Council in February 2024 when the Medium Term Financial Plan (MTFP) had been set.  The proposed additions to the budget would reduce that surplus to closer to £17,000, which would be returned to balances.

·             The accounts for 2020/21 had been submitted and in doing so Officers had found that the Council’s general fund position was £1.2 million higher than had previously been anticipated.

Members subsequently discussed the report in detail and in doing so welcomed news that the Council’s 2020/21 accounts had finally been submitted.  Moving forward, it was noted that Council budgets had been impacted by significant rises in inflation in recent years and there remained a need to be prudent when managing the Council’s budget.  Furthermore, Members noted that there were risks that could potentially have a negative impact on the Council’s budget position, including high demand for temporary housing and the impacts of competing with other organisations for raw materials on the potential for the Council to deliver key projects according to deadline.

RESOLVED to note

1)          the 2023/24 provisional outturn position in relation to revenue budgets was a projected revenue overspend of £386k after applying £557k from the Utilities Reserve as approved at Quarter 1. (Quarter 3 was £383k);

2)          the 2023/24 provisional outturn position in relation to Capital expenditure was £3.2m against a total an approved programme of £10.9m. (Quarter 3 was £2.586m);

3)          the provisional outturn position in respect of the General Fund Reserves, which would stand at £3.721m on the 31^st March 2024;

4)          the provisional outturn position in respect of Earmarked Reserves;

5)          HRA net revenue expenditure was break even at £0.0m (same as at Quarter 3) and Capital Expenditure was £0.2m more than budget (Quarter 3 was a £105k underspend);

6)          at the time of writing, the Council was yet to formally close its accounts for the 2021/22 and 2022/23 financial years. 2020/21 had been closed and submitted for public inspection but not audited. This could therefore result in adjustments to actual income and expenditure in those years and could have a consequential impact on the 2023/24 accounts; and

7)          work continued to refine the position including addressing the backlog of entries that were in suspense and any miscoding from 2021/2 through to 2023/4, therefore the provisional position detailed in this report was subject to change and a further update would be presented to Members in due course. 

RESOLVED that (subject to Council approving the overall funding):

8)          the Dial a Ride, crematorium sound system and market schemes, as shown at paragraphs 3.26 – 3.29, be approved; and

9)          Executive approve the revised fleet replacement programme.

RECOMMENDED that:

10)      the reprofiling of the Capital Fleet Replacement budget, relating to the Domestic Waste Collection Service, be approved;

11)      the underspend position as part of the Medium Term Financial Plan (MTFP), to be reduced by £81k to fund the crematorium sound system, street market and Dial A Ride change, be approved; and

12)      subject to the agreement of recommendation 8, the consequential reduction of Dial a Ride charges to £2.50 and medical fares to £3.50, in the Council’s Fees and Charges Scheme, be approved.