The report of the Section 151 Officer is attached.

Contact: James Walton (01743) 258915

The S151 Officer presented the report alongside the Draft Statement of Accounts which was the next item on the agenda. He detailed the significant overspend of £34 million for the year, primarily driven by the People Directorate's overspend due to increased demand and complexity in services, together with non-delivery of savings in Place and Resources Directorates. To balance the budget, measures included applying additional grant income, using reserves, and maximizing the capitalisation direction to cover transformation costs.

Members noted that the general fund balance was reduced from £8.2 million to £4.8 million, highlighting the need for future budgeting to increase reserves and ensure financial resilience. The capital programme and earmarked reserves were reviewed, with adjustments made to ensure alignment with the financial outturn and future financial planning.

Concern was expressed with regards to undelivered savings, particularly regarding staffing reductions and third-party spend. The S151 Officer reassured members that the focus was on delivering a robust Plan A, and not relying on exceptional financial support. Conversations with government were ongoing, especially regarding the potential impact of the Northwest Relief Road decision.

Members raised queries in relation to the RAG rating, supported living and spot purchasing, plans to reduce reliance on agency staff, overspend in home-to-school transport, the 28% increase in children’s early help and placements, the renewal of the highways contract and climate change budget variance.

In response to the RAG rating, the S151 Officer clarified that the corporate budget’s yellow rating reflects an income underspend (more income than budgeted), not an expenditure underspend.

In response to supported living and spot purchasing, Members were advised that supported living costs were higher than anticipated, and spot purchasing was driven by unplanned hospital discharges requiring immediate placements, which are more expensive. Improved visibility and monitoring are being implemented. Members raised concerns and requested that both subjects be included on a future work programme for further discussion.

With regards to agency staff, Members noted that agency spend is being reduced, with efforts to recruit permanent staff and use apprenticeships, but market conditions make this challenging. The Children Improvement Board is addressing capacity issues.

In response to the overspend in home-to-school transport, the S151 Officer attributed the increase to statutory requirements for rural and special needs transport, with academy schools’ decisions also affecting costs.

With regards to the increase in children’s early help and placements, Members were advised that while the number of children in placements is stabilising, complexity and external placement costs were rising. Foster care recruitment has not met targets, impacting costs.

Members noted that due to commercial sensitivity, the query regarding the highways contract would be responded to outside of the meeting.

In response to the climate change budget variance, the S151 Officer explained that the negative budget was based on expected income from pyrolysis and solar farm projects, which was not realised, resulting in a net overspend.

RESOLVED:

i)                That the committee considered, with appropriate comment, the Outturn Report alongside the Council’s Draft Statement of Accounts 2024/25.

ii)               That spot purchasing and supported living in adult services be added to the future work programme for further review.