To report the forecast position for 2024/25 at Quarter 1 (June 2024), including explanation and analysis of the drivers for the material budget variances, and to outline current and planned recovery activity to reduce the forecast overspend.

To provide assurance that progress has been made towards delivery of the agreed revenue budget and service delivery targets, and that the reasons for major variances are understood and are being addressed to the cabinet’s satisfaction.

The cabinet member for finance and corporate services introduced the report and highlighted that the report represents 3 months of actual transactions and 9 months of estimated income and expenditure. It was noted that it highlighted emerging budget pressures due to increasing demand across social care budgets, temporary accommodation and Special Educational Needs (SEN) transport services.

The approved revenue budget of £212.8m included planned savings of £19.5m comprising of £11.6m of directorate savings together with £7.9m of council wide budget savings. This year’s Q1 revenue outturn position for 2024/25 showed a variance from budget of £10.8m.  Management actions are currently planned to reduce this overspend to £6.8m as shown at table 2 of the report. 

This variance represents total cost pressures of £12.1m comprised of: £4.5m in-year net cost pressures for increased demand for adult social care, temporary accommodation and Home to School Transport. £4.8m 2024/25 savings targets currently assessed as at risk.  £0.4m 2023/24 savings targets assessed as at risk. £2.4m Council wide savings pending completion of directorate restructuring and vacancy reviews and this represents the balance of the MERS target.

The variance is reduced by £1.3m of delivered Children & Young People 2024/25 savings which were previously removed from the 2024/25 budget by the amendment in February 2024 that was approved.

It was noted that the forecast overspend is expected to reduce to £6.8m through the actions in Table 2 of the report. It was highlighted that each directorate will continue to identify further recovery action and options to mitigate at risk savings targets and ensure recurrent spending is sustainable within the resources available. Directorate recovery plans will also continue to be delivered.  

It was note that the additional expenditure controls implemented during 2023/24 and the associated management recovery actions had a positive impact on the final outturn position.  Thereby providing evidence that these actions work and it was confirmed that these controls remain in place to support recovery activity in 2024/25. 

Directorate panels will continue to review expenditure on goods and services as well as changes in staffing arrangements to challenge over expenditure for the remainder of the financial year. 

It was highlighted that this was a very different position to the one Cabinet found in Q1 last year, where in-year action must be taken to identify the steps to reduce the forecast overspend of £13.5m at Q1. Cabinet Portfolio holders conduct monthly reviews of their financial positions together with their Corporate Directors and this has been further supported by the improved quality of the Cabinet financial report.  It was reported that that the Finance Team have been shortlisted for the 2024 Public Finance award for Excellence in Governance, Reporting and Assurance.

A review of the delivery and status of the 2024/25 approved savings had been undertaken to determine savings targets at risk of in-year delivery. This confirmed that £8.2m (43%) of the total savings target for the year had been delivered at Quarter1 with a further £6.5m (33%) assessed as ‘on target/in progress’ for the year.  ...  view the full minutes text for item 25