Issue - meetings

To consider the Third Financial Review 2024-25.

The committee considered the report which set out the forecast outturn position for the financial year 2024/25 based on income, expenditure and known commitments as at the end of October 2024. The Third Financial Review (FR3) position shown an adverse variance of £18.3m (prior to the application of any Exceptional Financial Support - EFS) this was a slight improvement of £1.8m from FR2. The committee noted that whilst there was an improvement from the last Financial Review, the forecast overspend of £18.3m remained a significant financial challenge for the council. FR3 forecast reserves, after agreed movements budgeted for in 2024/25, were currently £14.0m, being £4.5m of General Fund Reserves and £9.5m of Earmarked Reserves. The council’s level of reserves was therefore insufficient to cover the current forecast revenue outturn for the year without further action.

Table 3 (paragraph 17) of the report set out the capital programme profiling changes from FR2. It was queried why the grants and contributions figures were estimated to rise so sharply between 2025/26 – 2027/28 and if this level of grants and contributions would likely be received. Officers committed to providing a detailed breakdown via a written response. 

Cllr Bulman arrived at 10.07am.

The committee noted the proposed use of EFS and reserves and also queried when government would likely give approval for the use of EFS for 2025-26. Approval had been received for the use of EFS during 2023-24 and 2024-25 however the council had requested to combine the two-years, for use in 2024/25.   No confirmation had yet been received however it was anticipated that this would be received before budget setting council, also including confirmation for the EFS required for the 2025/26 year. Should approval not be granted, it was likely that the Executive Director of Resources and S151 Officer would need to consider issuing a S114 Notice. 

RESOLVED:

That the Corporate Policy Committee

1. Note the factors leading to a forecast adverse Net Revenue financial pressure of £18.3m against a revised budget of £390.5m (4.7%).

2. Note the contents of Annex 1, Section 2 and review progress on the delivery of the MTFS approved budget policy change items, the RAG ratings and latest forecasts, and the actions to be taken to address any adverse variances from the approved budget.

3. Note the in-year forecast capital spending of £144.7m against an approved MTFS budget of £215.8m, due to slippage that has been re-profiled into future years.

4. Note the available reserves position as per Annex 1, Section 5.

5. Note the Capital Virements above £500,000 up to and including £5,000,000 as per Annex 1, Section 4, Table 4.