Agenda item

Report of the Chief Operating Officer (Section 151 Officer)

Cabinet considered a report of the Chief Operating Officer (Section 151 Officer) that had also been considered by the Audit and Procurement Committee at their meeting on 11^th December 2023, that advised of the forecast outturn position for revenue and capital expenditure and the Council’s treasury management activity as at the end of September 2023. The net revenue forecast position after management action was a net overspend of £11.5m. At the same point in 2022/23 there was a projected overspend of £11.3m. Appendices to the report provided: Revenue Position: Detailed Directorate breakdown of forecast outturn position; Capital Programme: Analysis of Budget/Technical Changes; Capital Programme: Analysis of Rescheduling; Capital Programme: Analysis of Over / Under Spend, and Prudential Indicators.

Cabinet noted that the report had been considered by the Audit and Procurement Committee at their meeting on 11th December 2023 (their minute 34/23 referred) at which the report was noted, and it was agreed that there were no recommendations to be forwarded to Cabinet.

The Council continued to face budget pressure within both Adults and Children’s social care, Housing, and Streetscene services. Other smaller but still significant overspends were also being reported in Project Management and Property and Transportation and Highways. Financial pressures were being caused by a combination of continuing high levels of inflation, increased service demands, difficult conditions within social care markets and recruitment difficulties in some services.

Recent months had seen a number of councils with social care responsibilities report large in-year budgetary difficulties and it was clear that there were systemic problems for the whole sector which represented a serious threat to its financial sustainability. The Council’s position above included a number of largely one-off actions that had already been taken to reduce the overspend, which meant that the underlying position was higher than had been experienced in recent years. In response, the Council was implementing a range of measures, proposed at quarter 1, to address the pressure in order to manage down the overspend to a less severe level.

The Council’s capital spending was projected to be £129.7m and included major schemes progressing across the city. The size of the programme and the nature of the projects within it continued to be fundamental to the Council’s role within the city. Inflationary pressures were also affecting capital projects. The assumption was that stand-alone projects that were already in-progress would be delivered as planned but that future projects that had not yet started may need to be re-evaluated to determine their deliverability within previously defined financial budgets.

The materiality of the emerging financial pressures, both revenue and capital, had renewed the imperative to maintain strict financial discipline and re-evaluate the Council’s medium-term financial position. This was reflected in the Pre-Budget report which was considered at the same Cabinet meeting as this report.

RESOLVED that Cabinet:

1)  Notes the consideration of the report by the Audit and Procurement Committee.

2)  Approves the Council’s Second Quarter revenue monitoring position.

3)  Approves the revised forecast capital outturn position for the year of £129.7m incorporating £2.2m net increase in spending relating to approved/technical changes, £0.2m underspend and £35.9m of net rescheduling of expenditure into future years.