Decision details

The Committee received the report which provided an overview of the Cheshire East Council final outturn for the financial year 2024/25 and the financial performance of the Council relevant to the committee remit.

The Third Financial Review (FR3) forecast revenue outturn was an adverse variance of £18.3m (prior to the application of any Exceptional Financial Support) an improvement of £1.8m from FR2.

·       The Overall Service outturn was +£10.2m overspend compared to £22.9m forecast at FR3 which was an improvement of £12.7m.

·       Place overall outturn was -£8.6m under compared to -£4.9m at FR3 which was a £3.7m improvement.

·       Highways and Transport were £1.8m underspent as a result of vacancies, managing spend and additional income which was a £1.3m improvement.

·       The key reasons for the underspend were outlined as:

·       Car Parking: £0.3m overspend, £0.4m vacancies are offset by reduced car park income £0.7m. This represents a £0.6m worsening since FR3 from reduced income.

·       Strategic Transport is a £1.2m underspend, largely due to vacancies, which represent a £1.1m improvement from FR3, there has also been a delay in new bus contracts taking effect.

·       An underspend of £0.8m across Ansa Transport commissioning, Infrastructure, Highways and Rail Transport Integration due to vacancies.

·       Overall Cheshire East Councils position was £17.6m overspend allowing for transfers to reserves of £7.4m which would be funded from Exceptional Financial Support.

In response to a question about the current position and targets for the general fund and earmarked reserves officers reported that the MTFS projects a substantial increase in general reserves, estimated at approximately £30m.

In response to a question raised in respect of whether borrowing money to fill up reserves and lending to money to other local authorities was considered as long term or short-term borrowing It was confirmed that lending was short term and borrowing was long term. Following a request for more information on the interest rates connected to borrowing and lending officers agreed to provide further information outside of the meeting.

Officers agreed to provide a written response to a question raised in respect of the amount of funding required in the current year to prevent further deterioration of the road network.

The committee expressed frustration that despite the Highways and Transport committee operating with one of the smallest budgets any underspend was reallocated to other areas rather than retained for future use within the service.

Officers stated that they could not predict future funding allocations but aimed to position the council to be in the strongest possible position to access additional funding when available. Responsibility for managing and reallocating underspend lay with the Section 151 Officer.

Following a request to have information at the end of each year on what had been spent in each area to be able to do a comparison each year officers agreed to explore how to provide members with clear breakdowns of expenditure across categories, information on funding guidelines, restrictions and the decision-making process for revenue and capital expenditure and provide clarification on how spending is allocated on a day to day basis and within the infrastructure programme.

RESOLVED (by Majority)

1. Consider the overall financial performance of the Council in the 2024/25 financial year, as contained within the report, as follows: a) A Net Revenue Overspend of £17.6m against a revised budget of £365.8m (4.8% variance) funded by conditional Exceptional Financial Support (Capitalisation Direction) via borrowing. b) General Reserves closing balance of £6.3m. c) Capital Spending of £88.4m against an approved programme of £215.8m (59% variance).

2. Note the contents of Annex 1.

3. Approve the new Reserves in the Reserves Section (Annex 1, Section 5, Table 1) which includes proposed movements to reserves.

4. Recommend to Council to approve the Supplementary Revenue Estimate (SRE) Request for Allocation of Additional Grant Funding over £1,000,000 as per Annex 1, Section 3, Table 1.

5. Approve the Supplementary Capital Estimates (SCE) and Capital Virements between £500,000 and £1,000,000 in accordance with Financial Procedure Rules for the following Committee’s as detailed in Annex 1, Section 4, Table 4.

6. Recommend to Council to approve the Supplementary Capital Estimates (SCE) over £1,000,000 in accordance with Budget and Policy Framework Rules as detailed in Annex 1, Section 4, Table 5.

The Committee adjourned for a short break.

Councillor A Gage left the meeting and did not return.