To scrutinise financial monitoring at Period 8 and identify issues that may require further investigation by an overview and scrutiny committee.

REPORT TO FOLLOW

The Executive Director Resources introduced the Financial Monitoring Period 8 Report highlighting key issues. 

The financial forecast for the Council at the end of November 2024 was a budget overrun of £37.311m by 31 March 2025, a deterioration from previous forecasts due to additional borrowing costs for the highways maintenance programme. A review of the corporate borrowing position of the capital programme would be conducted in Period 9 to identify compensatory savings. The financial position remained challenging, with various factors impacting the General Fund Balance and seven key financial factors identified, set out in the report, that could affect the Council's ability to manage expenditure within available resources.

The Portfolio Holder for Finance and Corporate Resources, the Leader, Deputy Leader and Assistant Director Finance and Technology, responded to questions raised by committee members relating to: the reasons for slippage in  savings delivery; why additional borrowing costs had not already been built in; level of reserves; and specifically about the Waste PFI contract renegotiation, shortfall in predicted income from introduction of charging for green waste; progress in the pyrolysis plant project and generation of income; the status of income strip proposals intended to fund costs related to transformation and redundancy, and whether there was confidence in the capacity and technical capability to deliver the savings that would be more difficult to achieve. 

The Portfolio Holder for Finance and Corporate Resources said that the Council was facing many challenges, including delivering £27m in staffing savings, with £18m still to come. PWC had helped to provide capacity, but timing issues and market environment complexities were causing some delays in achieving savings.  It was an extremely complicated picture across the board and this was the biggest savings target ever set, on the back of that saved last year.  Any organisation of the size and complexity of the council was likely to undergo slippage but the year would balance using reserves as on previous occasions. He reminded members of the situation this time last year when reserves were predicted to be about £2.3m until the final settlement.

The Assistant Director of Transformation and the Chief Executive referred to efforts focused on digitalization and prioritizing the resources of the Transformation Team around delivering savings. The council was working collectively to deliver plans and manage resources effectively, aiming to become right sized and sustainable without the constant need to make savings.

Responding to a member comment, the Leader reiterated that local government could never be as agile as commercial companies as structures and decision-making were completely different.  She reminded members of the need to save at least £450m since 2012.  Budgets were incredibly tight, and she referred to the now significant number of councils across the country who had asked for emergency funding.   

The Chair proposed and it was seconded that the Committee note the report.  It was also proposed and seconded this be amended to ‘note the report with concern’.  On putting the amendment to the vote it fell, and it was

RESOLVED to note the report.