The committee considered the report which
provided an overview of the council’s final outturn for the
financial year 2024-25. The committee noted that, prior to the
application of Exceptional Financial Support (EFS) and a proposed
£7.8m transfer to reserves, the 2024-25 service outturn
position was an adverse variance of £9.8m, reflecting an
underlying improvement since Financial Review Quarter 3 (FR3) of
£18.3m.
The committee agreed that
whilst improvement on the FR3 position was positive, the overspend
of £9.8m remained a significant financial challenge for the
council. It was noted that significant cost pressures in both
Adults and Children’s services remained a key
issue.
The committee queried the RAG
ratings used in Annex 1 – Section 2 and how these had been
applied. It was confirmed that:
-
Red Rating: Low Confidence – there were significant issues
and would likely to require additional decisions to bridge the
gap.
-
Amber Rating: Medium Confidence – savings proposals were at
risk but could be recovered / mitigated within scope of original
decision.
-
Green Rating: High confidence that the saving proposal was on track
with no concerns on the current forecast.
-
Completed Rating: Saving proposal had been delivered and no further
action was required.
It was noted that the council
proposed to increase its general reserves position at outturn
through borrowing £17.6m through EFS. Reassurance was sought
on the interest rates being paid on EFS. It was confirmed that
reserves would be increased through £5.3m Earmarked
‘Change Reserves’ to respond to the steps that would be
necessary to support the delivery of the transformation change
programme and improvement activity required through 2025-26 and
2026-27. £2.5m increase in the General Fund Reserves had been
identified to increase financial resilience into 2025-26 and future
years. However, the reserves were still not at an adequate level
and the issue of financial sustainability remained a key risk. This
had also been highlighted as a key risk by the External
Auditors.
It was clarified that, if the
above additions to Reserves of £7.8m were made at out-turn,
the annual revenue budget saving against the Capital Financing
Budget would be £250K p.a.
- The calculation of
the interest on EFS Borrowing £17.6m was calculated at the
PWLB Annuity Rate 4.86%.
- The average interest
rate on investments in 2024/25 was 5.10% (Annex 1, Section 6,
para 6.31)
It was confirmed that the
questions and detailed responses submitted by Councillor
O’Leary would be circulated to the committee.
The committee noted the capital
financing budget and anticipated interest costs on borrowing. The
committee queried if the repayments were fixed or variable as
having variable payments would make a significant difference to the
cost to the council. Officers committed to providing a written
response.
RESOLVED
(unanimously):
- Note 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).
- Note the contents of
Annex 1.
- 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.
- Approve the Adults
and Health Committee Supplementary Revenue Estimates (SRE) Request
for Allocation of Additional Grant Funding (Specific Purpose) over
£500,000 up to £1,000,000 as per Annex 1, Section 3,
Table 2.
- Approve the Children
and Families Committee Supplementary Revenue Estimates (SRE)
Request for Allocation of Additional Grant Funding (Specific
Purpose) over £500,000 up to £1,000,000 as per Annex 1,
Section 3, Table 2.
- 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 5, Table 4 • Children & Families •
Highways & Transport • Economy & Growth •
Environment & Communities
- 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.
- Approve the new
Reserves in the Reserves Section (Annex 1, Section 5, Table 1)
which includes proposed movements to reserves.