Agenda item

This was the first budget monitoring report for the new financial year and came at a time when the Council was continuing to experience significant financial pressures due to high levels of inflation and continued increase in demand and complexity of need in key services, such as Adults Social Care and Children’s Social Care. The forecast revenue outturn position for 2023/24 was an adverse variance of £8.3m, 2% of Portfolio budgets. This was primarily due to pressures in Health and Wellbeing and Education and Children’s Services from demand and market insufficiency issues, coupled with pressures in Accessible Housing and Resources in Energy budgets, Housing & Homelessness & Regulatory Services in Temporary Accommodation budgets and Transport in Parking income budgets.

Detailed Portfolio Action Plans were already in development to address the pressures, with a view to urgently bringing budgets back into line. These would consider the acceleration of savings plans from future years. In addition a member led Strategic Property and Finance Review would be initiated to examine opportunities for additional savings, income or capital receipt. The delivery of the action plans would be managed by the Portfolio Holders. The forecast position on capital budgets was break even.

RESOLVED:-

1. That the report and the risks and opportunities contained within it be NOTED. 

2. That the actions set out in the report to address the budget pressures be APPROVED. 

This was the first budget monitoring report for the new financial year and came at a time when the Council was continuing to experience significant financial pressures due to high levels of inflation and continued increase in demand and complexity of need in key services, such as Adults Social Care and Children’s Social Care. The forecast revenue outturn position for 2023/24 was an adverse variance of £8.3m, 2% of Portfolio budgets. This was primarily due to pressures in Health and Wellbeing and Education and Children’s Services from demand and market insufficiency issues, coupled with pressures in Accessible Housing and Resources in Energy budgets, Housing & Homelessness & Regulatory Services in Temporary Accommodation budgets and Transport in Parking income budgets.

Detailed Portfolio Action Plans were already in development to address the pressures, with a view to urgently bringing budgets back into line. These would consider the acceleration of savings plans from future years. In addition a member led Strategic Property and Finance Review would be initiated to examine opportunities for additional savings, income or capital receipt. The delivery of the action plans would be managed by the Portfolio Holders. The forecast position on capital budgets was break even.

The Cabinet Member for Accessible Housing and Resources outlined the £14m adverse variance in portfolios as follows:-

·         £3.9m pressure in Health and Wellbeing due to growth in client numbers, and increased cost of care packages

·         £3.9m pressure in Education & Children’s Services predominantly due to the national insufficiency of placements for children looked after leading to a shortage of available placements and very high unit costs of those placements that can be accessed

·         £1m adverse variance in Accessible Housing and Resources from Energy costs in Property & Assets exceeding budget

·         £1.5m adverse variance in Housing & Homelessness & Regulatory Services in Temporary Accommodation budgets due to increased demand, particularly for nightly paid accommodation

·         £3.2m adverse variance in Transport Services. This includes £0.8m due to increased contract costs in Home to School Transport with provider pressure to increase costs on letting of new contracts. In addition there is a forecast shortfall of £1.8m in the Parking Income budget

·         £0.7m pressure in Climate Change and Environment due to recycling income shortfall due to market volatility

·         The position also reflects a forecast shortfall on Energy from Waste income of £5.0m due to the reduction in market energy prices.

The £5.7m of favourable variances in corporate budgets includes:

i.                    £4.3m favourable variance relating to Interest on Revenue Balances. This reflects further increases in the Bank of England base rate.

ii.                   £0.8m favourable variance on interest payable budgets, due to recalculation of loan repayments.

iii.                 A minor surplus of £0.2m in grant income due to the budget being set prudently.

iv.                 A favourable variance of £0.3m arising predominantly from contribution from grants towards central overheads.

v.                   Corporate Contingencies are retained to address the ongoing risk of further pressures within the year.

vi.                 Available reserve balances.

The Leader referred to the current shortfall of £6.6m relating to the savings target. This had not been met due to parking income being affected by a reduction in demand since the pandemic, energy from waste income due to the reduction in market energy prices , streetworks income due to an increase in expenditure and a volatility in market prices fluctuations with regard to waste recycling. Financial risks on capital were currently the Housing Infrastructure Funding Schemes and securing Homes England approval to reallocate the HIF grant and for DfT to finalise the agreement of additional funding to deliver the South East Aylesbury Link Road, Future High Streets and committing the remaining grant funding and two Council projects; biowaste and Crematory and Hampden Chapel replacement.

RESOLVED:-

1. That the report and the risks and opportunities contained within it be NOTED. 

2. That the actions set out in the report to address the budget pressures be APPROVED.