Please note this is the Cabinet version of the report re-published for Members to comment on.

The Chief Financial Officer presented the Quarter 1 Forecast Revenue and Capital Outturn 2024-25 Report.

The report highlighted the forecast performance against the Council’s Revenue account showing the current position of forecasting, a net pressure of £3m which was 2% of the Council’s revenue budget and to highlight the focus for the remainder of the year to reduce that to zero pressure. 

The following key points were noted and highlighted by Members:

• £1.2m of the overspend was a result of an over estimation in respect of the covid grant. Members questioned what due diligence had been carried out when estimating the figures as it was noted that this was a significant sum.  The Chief Finance Officer explained the scheme allowed local authorities to claim for their loss of fees and charges income during the covid period and highlighted as it was new to everyone, it had been a difficult task in terms of estimating.  Lessons had been learnt and if it were to happen again, the Council would make sure as they went through the process of claims, it would be closely reconciled against the revenue.

• Members questioned if the Chief Finance Officer thought the overspend would have been worse if the Council did not have recourse to the reserves, did this mask the unhealthy financial position and what was being done to ensure a healthy balance of reserves.  The Chief Finance Officer explained that reserves were there for a specific purpose with the reserve monies being used for one off expenditure that will not continue into future years.  Therefore, the Chief Finance Officer did not agree they were masking the position as some of the reserves were grant monies received that had to be spent on specific areas, the grant monies had been placed on reserves as they had not been spent in the year in which it related.  Therefore, when the Council spend that money, it is drawn from the reserve to match the expenditure.  Assurance was given that the reserves that were being used were one off expenditure and not for any overspend at the end of the year as this would then carry forward into the next financial year.

• Members noted there was a budget forecast assumed of a total transfer from reserves of £10.6m.  Members questioned what this was for and what would be done to replenish the reserves.  The Chief Finance Officer explained some of the reserves would not be replenished as it was specific grant money. 

• Members questioned, based on the overspend in Quarter 1, did the Chief Finance Officer think there would be added pressures on Quarters 2, 3 and 4 and what was the forecast for the overspend.  The Chief Finance Officer explained the forecast was based on where the Council’s finances would be at the end of the financial year and a huge amount of work was being done to ensure accurate forecasting.

• Members questioned how much interest had been made on monies in the Council’s accounts.  Members were referred to the table on page 16 of the agenda.

• Members questioned the £.0194 forecast overspend relating to delays incurred in the roll out of MFD printers and was this figure recoverable against the contract with the MFD supplier.  The Chief Finance Officer explained this cost was due to dual running of two contracts.

• Members questioned what lessons had been learnt from Quarter 1 and how are those learnings going to be used going into Quarter 2.  The Chief Finance Officer advised a huge amount of work was carried out at the beginning of the financial year to ensure the forecast was as robust as possible.  At present everything was being reviewed to ensure confidence in reporting and forecasting was as accurate as possible.  It was further advised ongoing work with Directorates was taking place to mitigate the overspend with support and challenge by the finance directorate to improve the budget setting process.

Councillor Halden arrived at 7.25pm

• Members questioned if there was confidence that the Council was in a reasonable financial position bearing in mind the financial pressures the Council was currently under.  The Chief Finance Officer advised the situation is not ideal but considering the level of savings that was built into the budget, the pressure was challenging but manageable.   It was acknowledged the pressures driving the overspend needed to be tackled, however some are national problems, for example temporary accommodation, and therefore outside of the Council’s control.

• Members questioned the current position of the Thameside Theatre’s budget and expenditure as it was noted this was a considerable pressure in the last budget.  Action Point the Chief Finance Officer was uncertain of the current position and agreed to take this away and would report back to the Committee regarding the point raised.

• Members noted a report to the next Financial Recovery Board had been requested by Commissioners and could this report be shared with the Committee.  Action Point the Chief Finance Officer agreed she would check if this could be released to the Committee.

Resolved:

The Members noted the contents of the Report and thanked Officers for their hard work.