Agenda item

To consider a report on the third review of the Cheshire East Council forecast outturn for the financial year 2023/24.

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

The report highlighted the ongoing negative impact of high inflation, rising interest rates and increasing demand for services since the Council set its budget in February 2023. It detailed the important activities being undertaken to minimise the impact on services.

With the consent of the Chair, Councillor R Chadwick spoke as a visiting member in relation to the Notice of Motion at the December Council meeting, calling for an LGA Corporate Peer Challenge review of the Council’s forecast budget overspend. The Chair responded that he supported peer reviews in principle, having requested a review into organisational culture in 2020. However, he felt that the new Chief Executive should be given time to consider the matter first. He also stressed that a peer review would not be concluded in time for the Council’s budget to be approved.

The Vice-Chair added that a peer review was one of a number of options provided by the LGA. Whilst he endorsed such a process, it would take time to organise, given the need to co-ordinate the diaries of the peer members and officers.

The Chief Executive advised that a CPC review was a useful process and he had initiated discussions with the LGA. The lead-in time for a review was typically six months. It may be possible to start a review in about three months’ time but this would depend on the availability of those to be involved. He was due to meet with the LGA again next week.

Councillor N Mannion, as Chair of the Finance Sub-Committee, advised that the Sub-Committee had discussed the matter at length at its meeting on 11^th January.

Members noted that the third financial review was forecasting a budget overspend in 2023/24 of £13m, an improvement of £5.7m since the second review. However, it was also noted that a £13m deficit would virtually eradicate the Council’s remaining General Fund Reserve balance of £14.1m, severely reducing the Council’s ability to produce a balanced MTFS for the next financial year. Therefore, the Council would be exploring opportunities to increase the General Fund Reserve.

In response to a question from members, the Director of Finance and Customer Services confirmed that the Dedicated Schools Grant deficit currently stood at approximately £90m.

RESOLVED

That the Committee

1.    notes the report of the Finance Sub-Committee on 11th January, 2024;

2.    notes the factors leading to a forecast Net Revenue financial underspend of (£1.0m) against a revised budget of £41.7m (2.4%), for Corporate Policy Committee services;

3.    notes the forecast and any further mitigations to be identified;

4.    notes the in-year forecast Capital Spending of £10.6m against an approved MTFS budget of £12.8m, due to slippage that has been re-profiled into future years, in respect of Corporate Policy Committee projects; and

5.    notes the contents of Annex 1 and Appendix 3 of the report, and notes that any financial mitigation decisions requiring approval will be made in line with relevant delegations.