Agenda item

To receive an update on the Council’s financial monitoring position.

In the absence of the Cabinet Member: Finance, Governance and Customer Services, the Leader of the Council presented the report of the Interim Director: Finance, People and IDT.

The Medium Term Financial Strategy (MTFS) 2024/25 to 2027/28 was approved at Full Council on 29 February 2024 and included the 2024/25 revenue budget and medium term capital programme.  Since its approval, the economic climate had continued to be challenging with cost pressures being experienced, particularly in relation to the provision of Adult Social Care.

Nationally, Councils had continued to face extreme challenges in 2024/25 with

unprecedented pressures driven by high costs and high demand for services particularly Adult Social Care, Children’s Safeguarding and School Travel Assistance. The Autumn Budget presented by the Chancellor on 30 October 2024, set out a medium term plan for public finances which included a one-year Spending Review covering Departmental budgets for 2025/26 with a further Spending Review stage in late Spring 2025 which it is anticipated will cover 2026/27 and 2027/28.

The headline figures indicated a real terms increase in core local government

spending power of around 3.2% in 2025/26, including at least £1.3bn of new grant funding, of which £600m will be new grant funding to support social care. However, there are many unknowns and lack of clarity about what funding streams are included and the detail and impact on individual local authorities will not be known until the provisional Local Government Finance Settlement which would be announced in early December.

The report set out the latest financial monitoring position for the year relating to the revenue budget, capital programme and income collection.  It provided the latest projections in relation to the projected outturn position, progress against the approved 2024/25 capital programme and gave a summary of collection information in relation to Council Tax Business Rates and Sales Ledger income.

The funding outlook for the medium term remains very uncertain and will clearly continue to be challenging, particularly given the Council has already had to deliver £156.9m ongoing budget savings since 2009/10.

The report also highlighted that the budget was within limits after applying contingencies set aside at the start of the financial year. An additional £6.7m had been invested in Adult Social Care due to ongoing pressures. Despite these challenges, the Council had maintained a surplus, avoided drastic interventions, and kept the £21.7m budget strategy reserve intact.

Although income monitoring was slightly below target, it was anticipated that targets would be met by year-end. Projections would continue to be refined, and a further monitoring report had been scheduled for the next Cabinet meeting taking place on 6 January 2025.

The Leader highlighted that the Council had an excellent track record of strong financial management and while extremely challenging the Council would continue to deliver quality services to the residents of the borough and protect critical front-line services.

Cabinet Members welcomed the report which showed due diligence, and that the Council was in a good position to deliver a balanced budget despite the increase demand in services such as Adult Social Care and Children’s Safeguarding. Members acknowledged the hard work of Officers and their role on maintaining the budget and praised the Council’s robust financial management and strategic decision-making on projects such as the Growth Fund, NuPlace and Solar Farm to ensure revenue regeneration for the Council.

The Leader of the Conservative Group recognised the work of the Council’s Finance Team and acknowledged the complexity of the accounts and the pressures on the Council, particularly in social care, emphasising the need to predict demand more accurately. He raised concern over the overspend from dedicated school grants due to the introduction of new rules for children and young people with special educational needs and the associated costs. He noted the anticipated 3.2% increase in spending power and asked whether it would be real terms.

REMCOMMENDED TO FULL COUNCIL that:-

a)    the 2024/25 revenue budget position be noted;

b)   the position in relation to capital spend; and recommends that Full Council approves the changes to the capital programme detailed in Appendix C and all associated changes to the Medium Term Financial Strategy, including Treasury and Prudential Indicators;

c)    the collection rates for NNDR, council tax and sales ledger be noted; and

d)   the current position in relation to Treasury & Prudential Indicators be noted.