Decision details

The Sub-Committee considered a report on the third review of the Cheshire East Council forecast outturn for the financial year 2023/24.

Officers advised that recommendations 5 and 6 of the report had been included in error and had been withdrawn. The recommendations would be added to the financial review reports to the Children and Families and Environment and Communities Service Committees.

The Director of Finance and Customer Services advised that the forecast overspend of £18.7m in 2023/24 had now been reduced to £13m. General Reserves stood at just over £14m. Officers would continue to seek to reduce further the projected overspend.

With the Chair’s consent, Councillor R Bailey spoke as a visiting member, and referred to the Notice of Motion submitted to December Council calling for an LGA Corporate Peer Challenge review of the Council’s forecast overspend. The Director of Governance and Compliance advised that the Notice of Motion had been referred to the Corporate Policy Committee and a report would be included on the agenda for the Committee’s meeting on 13^th February.

In response to members’ questions and comments, officers advised as follows:

§  The Council was still in discussion with the Government about the possibility of recovering £8.6m of expenditure incurred in preparation for the now cancelled HS2 Phase 2. The figure was still being treated as capital and was not part of the projected overspend.

§  If the Council were unable to reduce the projected overspend to zero by the end of the financial year, reserves would have to be used.

§  If the general reserves were reduced to nil, earmarked reserves would have to be utilised instead, regardless of their prior purpose. Additional savings would have to be made to restore reserves to an adequate level.

§  The details of what would be included in the terms of reference of a peer review, how long it would take and at what cost, would be included in the report to the Corporate Policy Committee.

RESOLVED

That the Sub-Committee

1.    notes the factors leading to a forecast adverse Net Revenue financial pressure of £13.0m against a revised budget of £353.1m (3.7%);

2.    notes the forecast and further mitigations needing to be identified, aimed at bringing spending back in-line with budget;

3.    notes the in-year forecast Capital Spending of £171.1m against an approved MTFS budget of £214.7m, due to slippage that has been re-profiled into future years;

4.    notes the contents of Annex 1 and each of the appendices and note that any financial mitigation decisions requiring approval will be made in line with relevant delegations; and

5.    as recommended by the Economy and Growth Committee on the 12^th September 2023, unanimously approves a virement of £6.8m from the North Cheshire Garden Village projectto create a separate project for the S106 Development obligations that is required by the Local Planning Authority to fund the initial infrastructure works on the site (as detailed in Appendix 7 Finance Sub-Committee, Section 5 Capital Strategy, Table 5.)