Agenda item

Report of the Director of Finance and Resources (Section 151 Officer)

The Audit and Procurement Committee considered a report of the Director of Finance and Resources (Section 151 Officer) that had been considered at the meeting of Cabinet on 8^th July 2025 (their minute 11/25 referred) and would also be considered at the meeting of Council on 2nd September 2025. The report outlined the final revenue and capital outturn position for 2024/25, and reviewed treasury management activity and 2024/25 Prudential Indicators reported under the Prudential Code for Capital Finance. Appendices to the report provided: a detailed breakdown of Directorate Revenue Variations; Capital Programme Changes and Analysis of Rescheduling; and Prudential Indicators.

The overall financial position included the following headline items:

•  An underspend of £1.8m, balanced by a contribution to earmarked reserves.

•  Capital Programme expenditure of £128.8m.

•  A small increase in the level of available Council revenue reserves from £118m to £119m.

The Council had faced significant pressures within both Adults and Children’s Social Care, and City Services. Other overspends were also being reported in Regeneration and Economic Development, Legal and Governance, People, and Organisational Development. These financial pressures were being caused by a combination of continued increases in service demand, complexity of cases and social care market conditions, legacy inflation impacts, income shortfalls due to reduced activity, and slippage in the delivery of some service savings.

The underlying revenue position had improved by £8.8m since Quarter 3 where an overspend of £7.0m was being forecast. The majority of the improved position related to increased one-off income within Contingency and Central budgets which were set out in section 2.1.4 of the report.

The Committee asked questions and sought assurances at the meeting from officers on matters including: the funding provision and the financial impact on Council services for supporting new communities in the city; the Council’s  position in relation to the level of its reserve balances, which placed the Authority in a strong financial position; attracting higher income earners to live and work in the city through new developments; the expectation that the Cultural Gateway Project would operate commercially; and the restrictions and prohibited uses of Public Works Loan Board borrowing, the main source of loan finance for funding local authority capital investment, for which there was no maximum borrowing limit. 

The Committee requested that details of the prohibited and the permitted uses of Public Works Loan Board borrowing, be circulated to them.

The Committee discussed lobbying the Government regarding the restrictions on access to Public Works Loan Board borrowing, if Councils chose to pursue new regeneration investment opportunities. They agreed that the matter be referred to the Cabinet Member for Strategic Finance and Resources for consideration.

RESOLVED that having considered the contents of the report, Audit and Procurement Committee referred the following matter to the Cabinet Member for Strategic Finance and Resources:

1)  The Audit and Procurement Committee requests that the Cabinet Member for Strategic Finance and Resources considers lobbying the Government on behalf of the Council regarding the restrictions on access to Public Works Loan Board borrowing, if Councils choose to pursue new regeneration investment opportunities.

(Note: HM Treasury - Public Works Loan Board Guidance for Applicants – August 2021 was subsequently circulated to Members of the Committee which provided information regarding borrowing for new regeneration investment opportunities)