Report by Director of Resources and Deputy Chief Executive (attached)

The Committee considered a report by the Director of Resources and Deputy Chief Executive (circulated previously) regarding Performance and Financial Management of Quarter 2 of 2024/25.

The Finance Manager highlighted the following:

·         The revenue budget for 2024/25 was approved at Council on 21February 2024 at £16,432,690.

·         As at 30September 2024,the latestforecast netbudget was £16,438,690, whichproduces abudget deficitof £6,000.Details were shown in “Appendix A – Variations in the Revenue Budget” of the agenda.

·         As part of the previous year’s outturn we contributed an additional £250,000 into the insurance reserve to mitigate against higher costs in 2024/25 and it was planned to use £243,000 from this reserve to offset the additional costs in this financial year.

·         The original budgetfor 2024/25includes aforecast toachieve £250,000 worth of salary vacancy savings.The current position forecasts we willachieve £256,000based onknown vacanciesto date.

·         There was still pressure on the Temporary Accommodation budget and we are fundingthe anticipated additional costof £186,000 from in year Temporary Accommodation grant.

·         The additional costs of £199,000 for Works units transport and SFS lease costs have been mostly offset set in year by £170,000 from the SFS vehicle reserve.The variances were due to the increased costs of borrowingwithin thefinance leasepayments combinedwith anincrease in vehicle purchase prices that SFS have experienced.

·         Pay and Display income has continued to follow the 2023/24 trend of slightly lower volumes, combined with the effect of the capital works being undertaken at Queen Street car park.  We were now forecasting a £200,000reduction.

·         We are now estimating income growth from Business Rates to be an additional £200,000.

·         As at 1April 2024 the Collection Fund reserve balance held was £1,790,180.This earmarked reserve was created todeal with the timing impacts of the Collection Fund (Business Rates), which ensured the revenuebudget wasnot undulyaffected in theyear thetaxes werecollected.  Collection Fund deficits/surpluses were reversed out to bring the revenue account back to the budgeted figure for the year; the deficits/surpluses were recovered/distributed in the following financial years.  This reserve included a£1,246,078 balancethat wouldbe utilisedin 2024/25£1,012,856 and 2025/26 £233,222 to mitigate timing differences of business rate reliefs awarded in 2023/24 that from an accounting perspective impact over the next two financial years; thus leaving the fundreserve witha residuebalance of£544,099 protection againstfuture volatility.

·         At the 30 September 2024 total external borrowing, excluding finance leases, was £6,000,000.The timing of any future borrowing was dependent on how the authority managed its treasury activity.

·         Due to project spend slippages in the Capital programme and using the cashflow balancesfor internalborrowing, we areestimating areduction in borrowing costs and a potential underspend of £125,000 on the interest payable revenue budget.

·         The Budget and Financial Framework report to Full Council 21st Feb 2024 outlined the Capital Programme for the 2024/25 financial year of

£20,258,368.  Project underspendsfrom 2023/24and furthervariations totalling £3,769,590 were approved as part of the performance and financialmanagement report to Strategyand Resources Committee,to produce a revised Q1 2024/25 Capital Programme of £24,027,958.

·         The table at paragraph 4.4.3 of the agenda report detailed the overall variations of minus £1,275,722 proposed to the 2024/25 capital programme.

·         The overall revised Capital Programme for 2024/25 to 2026/27 taking into account the budget variations above was £32,203,706 and was broken down as follows:

·         2024/25 £22,752,236

·         2025/26 £8,239,505

·         2026/27 £1,211,965

·         The actual spendfor 2024/25 asat 30October 2024 is£4,903,000.

·         The Programme of £32,203,706 was funded by Capital Receipts (£320,000),External andInternal Borrowing(£13,740,884), ExternalGrants and Contributions (£16,066,037) and Reserves (£2,076,785).

·         Appendix E of the agenda report provided details of the Corporate Plan, Key Results and Performance Indicators updates.

In response to a question on whether the staff salary saving was good news or not, the Finance Manager replied that the salary savings were calculated as a result of staff naturally leaving and the timing of replacements starting in post.

The Chief Executive added that we were not looking to increase this figure as loss of staff would leave gaps in service provision.  That naturally happens as staff left and new starters began there were timing gaps providing savings.

RESOLVED:

(a)  That the actions being taken to ensure that performance was at the desired level be noted;

(b)  That the contributions to/from earmarked reserves, as detailed in section 4.2 of the report, be approved;

(c)  That the movement of the Strategic Contingency Reserve, as detailed in section 4.3 of the report, be noted;

(d)  That funds be released for capital schemes, as detailed in section 4.4.8 of the report;

(e)  That the sections dealing with Treasury Management, as detailed at sections 4.5 to 4.7 of the report, be noted;

(f)   That section five dealing with the Corporate Plan, Key Results and Performance indicators, and as shown in detail at Appendix E of the report, be noted; and

RECOMMENDED:

(g)  That Council approve the variations of the Capital Programme for 2024/25 to 2026/27, as detailed in section 4.4.3 of the report.