Agenda item

John Betts ( Interim Corporate Director Finance) Cath Head (Head of Finance Operations) and Joe McKay (Acting Chief Accountant) were in attendance for this item.

1.    Mr Rayner (Deputy Cabinet Member for Finance, Corporate and Traded Services) introduced the report that set out the revenue and capital budget monitoring position as at June 2024-25 (Quarter 1). The forecast revenue outturn position was an overspend of +£16.3m (excluding schools), which represented 1.1% of the revenue budget. Overspends were being reported in Adult Social Care & Health (+£16.5m), Children, Young People & Education (+£0.1m), Growth Environment & Transport (+£6.2m) and Corporately Held Budgets (+£2.3m). Underspends were being reported in Chief Executive’s Department (-£0.9m), Deputy Chief Executive’s Department (-£0.9m) and Non Attributable Costs (-£7.1m). The Schools’ Delegated budgets were reporting an overspend of +£23.1m. From the savings target of £111.2m, the current forecasted position indicated a £93.3 in year saving to be delivered.  The savings would continue to be monitored closely across teams within the organisation as non-delivery of savings would have a significant impact on the future years’ budget. It was critical that the overspend be reduced to as near a balanced position as possible as any overspend would weaken the Council’s future financial stability. The use of reserves for one off solutions would need to be replenished. The forecast outturn capital position indicated a real overspend of £7.7m and a rephasing variance of -£63.1m (a net underspend of £55.4m). Capital budget adjustments required Cabinet approval.

2.    Further to comments and questions from Members it was noted:

·         In relation to the financial pressures within the Growth, Environment and Transport directorate, it was highlighted that the English National Concessionary Travel Scheme passes issued by the Department for Transport (DfT) had placed a £3m pressure on KCC due to the change in the reimbursement calculation whereby local authorities were required to pay bus operators for carrying concessionary passholders. Furthermore, unplanned incidents such as those relating to the need to replace the jet fans in Chestfield tunnel created further  budgetary pressures for the directorate. These demonstrated areas of financial pressure faced by the Council which were not foreseen and where further savings would need to be made to offset those spends.

·         In regard to the Dedicated Schools Grant budget, work was underway to bring this back under control and onto a sustainable footing. Those changes would start to be seen in later iterations of financial reporting. The Council continued to spend more than it was funded for through the Government’s national funding formula and this needed to end. The reforms which were being taken forward by the Council, which included the Special Schools Review and the locality model amongst others all aimed to improve the offer for children with Special Educational Needs and Disabilities (SEND) and provide long-term solutions which were also fair on the council tax-payer.

·         The Adult Social Care budget was in a more positive position compared to the same period last year, however, whilst the forecast position indicated that the directorate was 3% off its targeted budget, this equated to £16.5m of savings that had to be achieved. For those projects where savings had not yet been achieved, replacement savings would need to be found in-year. Reasons for delay included transformation programmes taking longer to deliver due to the scale of process and/or technology change, there was also a reliance on partnership organisations to help deliver savings, some of which did not move at the pace required which impacted on the ability to meet the in-year savings. Assurance was provided that work would continue at pace within the directorate to deliver the reforms. 

3.    The Leader commented on the improved position in terms of the projected overspend compared to the same period last year and recognition was paid to staff across the organisation in managing the increased cost and demand within services and the ability to still meet savings which was an important achievement. However, further improvement was required and the delivery of savings would only be achieved through the continued use of spending controls. The Leader paid recognition to the Children’s, Young People and Education department for the work undertaken to bring it into budget.

4.    RESOLVED to:

a) Note the forecast revenue overspend of £16.3m (excluding Schools).

b) Note the forecast overspend on Schools’ Delegated Budgets of £23.1m.

c) Note the forecast capital underspend of £55.4m.

d) Note the progress on the delivery of savings.

e) Agree the Revenue budget changes.

f) Agree the Capital budget changes.

g) Note the Reserves Monitoring

h) Note the Prudential Indicators Monitoring