To scrutinise financial performance at Quarter 1 and identify issues that may require further investigation by an overview and scrutiny committee, report to follow

The Executive Director for Resources introduced the corrected report which provided a detailed review of the Council’s financial position as at the end of June 2024, which showed an anticipated overspend of £38.5million. He drew members’ attention to table 4 which provided a breakdown across various service areas and expressed concern that the general fund balance was insufficient to be comfortable with the anticipated level of overspend.

Members noted the three scenarios, (favourable, central, and adverse) for the financial risk, with the favourable scenario projecting an overspend of £25.5 million, central with £38.5million and adverse with £73.75million.

Members were advised that the resizing exercise, estimated to be around £5.5 million, would be allocated to reduce the overspend figures by period 6.

Concern was expressed about the lack of up-to-date information and a query was raised as to why period 4 data was not available for scrutiny. The Executive Director for Resources responded by clarifying that the period 4 report had not been produced and signed off by the Chief Executive Team. He assured that a verbal update based on the latest information would be provided later in the meeting.

A query was received regarding the organisational savings and the initiatives proposed to mitigate the shortfalls. The Assistant Director for Finance and Technology explained that some savings were simple to deliver, while others were more complex and took longer than anticipated. He mentioned that a cross-cutting group of officers was working on savings delivery and thematic leads had been assigned to support service areas. He also highlighted the importance of scrutinising individual transactions to ensure necessary spending only.

Members expressed concern about the slow progress in delivering savings and the large number of yet-to-be-realised notes in the report. Further information on the state of play and specific areas like green waste management and the pyrolysis plant were requested. Members were advised that the green waste charging had just gone live, and they could only account for six months of income in the current financial year. The Assistant Director for Finance and Technology added that the delay in the pyrolysis plant was due to issues with the group structure around delivery.

Members questioned the forecasted adverse position of £73.75 million and what factors could tip the central scenario to the adverse scenario. Members were referred to Table 3, which showed the breakdown of figures for the adverse scenario and noted that the adverse scenario considered unknown risks and potential failures in savings delivery.

A recommendation was received to direct the Chief Executive to attend the first meeting of the Transformation Task and Finish Group with a plan to reduce 3^rd party spend by 10% and provide a plan to deliver savings within the Place directorate. An amendment was requested to include members’ disappointment at the lack of information concerning risks facing the Council and concern that arrangements were only now being put in place to secure tighter control over all aspects of spending. Upon a vote, the amendment fell and it was:

RECOMMENDED:

That the Chief Executive be directed to attend the first meeting of the Budget Task and Finish Group with a plan to reduce 3^rd party spend by 10% and provide a plan to deliver savings within the Place directorate.