Agenda item

To consider the Budget Performance Q1 report 2023-24 as reported to Cabinet on 11 July 2023.

Contributors:

Councillor John Chilver, Cabinet Member for Accessible Housing & Resources

David Skinner, Service Director for Finance (Section 151 Officer)

Papers:

Budget Performance Monitoring Q1

The Cabinet Member for Accessible Housing & Resources noted the following points when introducing the report:

·       The overall revenue outturn forecast was an adverse variance of £8.3m (2% of the budget) which consisted of a portfolio overspend of £14m offset by favourable variances of £5.7m.

·       There was an additional £0.7m pressure from Climate Change & Environment due to £5m income shortfall from the Energy from Waste plant. This would be offset by a drawdown from the energy waste reserve.

·       The £5.7m favourable variance in corporate budgets was largely attributed to net interest rates producing a £4.3m income.

·       There was a forecast shortfall of £6.6m in savings, largely due to the reduced Energy from Waste income.

·       There were detailed action plans in development across each portfolio to address revenue income opportunities, property and assets, and accelerating savings e.g. contract rationalization.

·       The capital programme was projected to break-even which took into account a recent reprofile.

·       Q1’s payment performance had further increased to 96.7%, up 2.5% compared to Q4.

The following points were noted during the Committee’s discussion:

·       Members noted that Budget Scrutiny in January 2023 had wanted further detail on the modelling system used in the pressure areas to consider its robustness and understand the variances. A discussion was had about the different models that underpin the forecasting and a typical example was provided setting out that, for instance, Childrens services will model based on different unit prices and volumes for each strata of cost elements. Other services apply a similar approach based on their cost drivers. Members will be able to consider different models during the budget setting for 2024/25.

·       Pressures on Adult Services was partially due to a depletion of self-funders which was likely due to increased costs caused by inflation.

·       Costs in Children’s Services currently exceeded inflation. Demand in this area had flattened locally but had increased nationally thereby saturating the market. Other additional factors included refugee resettlement and unaccompanied children. The service was looking at innovations to address this and leading to the consideration of bringing services in-house. It was suggested that Budget Scrutiny 2024 may want to investigate this further.

·       The financial model allowed for a number of planned and unplanned days within the expected income streams. Members would be able to examine this in more detail at a future meeting when considering the EfW financial implications.

·       One Member noted the importance of the portfolio action plans referenced in the report.

·       The Cabinet Member saw merit in the suggestion that savings and income figures be known specifically alongside their cumulative values. 

·       In response to concerns regarding the SEALR and future link roads around Aylesbury, the Leader advised that these would be pieced together as part of developments e.g. Kingsbrook and Hampden Fields. The SEALR was to be funded by the Housing Infrastructure Fund (HIF) however inflation had increased the costs. In response, the Council had been negotiation with Homes England for vire funds. The outlook was looking positive to receive these funds and the Council was considering proposed conditions that would come with the additional funding. It was noted that many Councils had been impacted by this however few Councils had been offered this arrangement. Members appreciated the update and suggested that regular communication on the topic to local Members be reinstated even if there was no tangible update available. 

·       Discussions on the Eastern Link Road remained commercially sensitive and ongoing.

·       The increased costs relating to access and maintenance of the electricity grid was a national trend and had been passed onto the Council by external providers.

·       Clarity on the £1.9m bid for electric vehicle charging points would be provided after the meeting.

Action: D Skinner

·       A report was in development to consider bad debt and write-offs.

·       The adverse variance in Housing & Homelessness may be due to landlords either increasing rents or selling the property due to interest rate increases. Upcoming proposals regarding banning Section 29 ‘No-Fault Evictions’ may also have created a spike in housing need.

·       The Council was considering all options to address increased costs in temporary accommodation, and it was noted that market capacity had been decreased by asylum seekers. £1.6m adverse variance was the current position but was subject to change.

·       The general fund reserve was £43m and there were no plans to release funds if the figures remained the same. There would be an opportunity to interrogate the waste reserve figures at the next meeting when Members would be considering the Energy from Waste report.  

The Chairman thanked the Cabinet Member for the report.