Agenda item

Cath Head (Head of Finance Operations) was in attendance for this item.

1. Peter Oakford, Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services introduced the report which detailed the overall Revenue and Capital budget outturn position as of 31 March 2024. The revenue overspend was +£12.4m, which included roll forward requests of £2.8m.  Within the overall outturn position, there remained significant overspends in Adult Social Care of +£32.6m and Children’s, Young People and Education of +£26.6m (with possible minor variations to the figures during the final stages of the year end processes and external audit). Mr Oakford noted the proposal to fund the £12m underlying overspend from the budget stabilisation smoothing reserves; however, it was noted that any draw down from the reserves weakened the council’s financial resilience and any further overspends needed to be mitigated to ensure future sustainability.

Mr Oakford noted that the Capital programme spend for 2023-2024 was +£216.4m which represented 52.9% of the approved budget. This was a £192.7m underspend against the budget, which was split between a +£5.5m real variance and -£198.2m slippage/re-phasing variance. Recommendations to roll forward the rephasing into future years was detailed within the report.

The first quarterly report for 2024-2025 was due to be presented to the September Cabinet.

2. Mr Gough noted the considerable amount of work that had been done to reduce the overspend figure and thanked both Cabinet Members and Officers for implementing the spending controls introduced in the latter part of 2023 and reducing the projected £50m overspend. However, the Council was still presented with a £12.4m overspend which emphasised the scale of pressures within the policy areas of Adults, Children’s services, particularly in relation to care placement costs, and SEN transport. Focus needed to remain on delivering the savings programmes and ensuring the growth rate of activity within those areas of spend did not impinge on other parts of the Council. Whilst Securing Kent’s Future provided an effective framework, there remained a great deal of work to be done.

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

·         Members reiterated the Leader’s comments concerning the excellent work of officers and paid thanks to all those involved in reducing the overspend. However, whatever the result of the upcoming general election, it seemed very likely that austerity needed to remain in Kent.

·         In regard to Children’s Services, there continued to be a number of reforms, particularly in relation to SEND services and this work was being done in collaboration with the Department for Education (DfE) and NHS England. These changes were paramount to both improving the quality of SEND services through effectively targeting resources; and ensuring that spend was brought into balance with the funds available to reduce the burden on the Council Tax Payer. A report on those SEND transformation projects would be presented to a future meeting of Cabinet. In regard to the Schools High Needs Block funding, the Council entered into the Safety Valve Agreement which reduced the cumulative deficit arising from the existing forecast overspends until 2028; however, this was a temporary measure and work needed to continue to reduce the deficit and ensure spending was in line with the funding available. The risk of not reducing the deficit within the agreed Safety Valve timeframe would have a detrimental impact on both the Council and the Council Tax Payers.

·         Covid and the increase in inflation had put an enormous financial strain on Adult Social Care, however, the directorate had undertaken a considerable amount of work to reduce those costs and work continued to be done in combination with the Integrated Care Board to reduce costs and deliver positive transformation.

4. Mr Gough thanked colleagues in finance for their work and recognised the monumental challenge they continue to undertake in ensuring the Council’s future sustainability. 

5. RESOLVED to agree the recommendations as outlined in the report.