Agenda item

The Deputy Chief Executive and Section 151 Officer reported that at Quarter 3 (as of March 2024) the overall budget position was a £383,000 overspend after application of the 2023-24 Utilities Reserve. The final Outturn Report for 2023-24 was to be presented to the Executive Committee on 9^th July.

In relation to Departmental Savings, it was reported that these were on track for delivery for 2023-24, with two amber items that required careful monitoring:

·       The Service Reviews (Establishment) – The savings figure should be achieved, covered by the difference between staffing vacancies and agency staff. A full Council Establishment Review was being undertaken which would confirm the ongoing position and put in place processes to keep tight control of staffing changes, including linking people to positions. It was noted there were around 110 agency staff across an organisation of circa 800 staff. It was highlighted that the Establishment accounted for almost 50 per cent of the Council’s controllable budgets.

·       The Capacity Grid project, recouping old Council Tax and Business Rates debt was in mid flow. Presently levels for pre 2023/4 were £337,000 of Council Tax and £32,000 of Business Rates. £3.5m of Council Tax debt and £468k of Business Rates debt was currently being assessed.

·       In relation to the red item as in the January 2024 Savings Monitoring Report, the Finance Vacancies, the saving figure would not be delivered as additional resource had been employed to progress work on completing outstanding years’ Statements of Accounts. 5 staff had been recruited to start at the beginning of 2024-25 financial year and this would result in reduced costs over charges incurred to date for employing Agency staff.

It was reported that the largest savings item was on pension costs which link to the 2023 triennial revaluation. These revised figures run for three years. There was a risk that these figures would increase when the next triennial revaluation takes place from the 2026/27 financial year.

Following the report presentation, some Members expressed concern about the overspend position. It was explained that the overspend position was mainly due to the staff pay awards, as there had been two consecutive pay awards of circa 6 per cent in 2022-23 and 2023-24. It was explained that the salary increases were not funded by central government, but through the Council’s budget. The Council had allowed for 3 per cent pay award in its 2024-25 budget.

It was explained that the overspend was partly offset by the lower-than-anticipated utilities inflation. The Council had originally set up utilities reserve in 2022-23, for assumed utilities inflation of 200 per cent. Due to lower than assumed inflation, for 2023-24, a budget to account for 100 per cent utilities inflation was set up and the other 100 per cent was converted to a reserve. The actual utilities inflation in 2023-24 was at 70 per cent. The amount remaining based on underspend in 2023-24 utilities budget would be released back into the General Fund.

It was explained that the 2024-25 Quarter 1 Financial Savings Monitoring Report would include proposals on how the £383,000 overspend position stated in this report had been addressed. In relation to the Council’s income, it was reported that the Council generated yearly income of circa £2-3 million through fees and charges. It was noted that risks in terms of costs were highly variable, cost increases being experienced in areas such as claims for tree damage (insurance), and Council property assets.

RESOLVED that

final position on the 2023-24 Departmental Savings Programme be noted, including any potential implications for future years.