Agenda item

To consider the current forecast outturn for the financial year 2024/25 based on income, expenditure and known commitments as at the end of July 2024.

The Sub-Committee considered a report on the first review of the Cheshire East Council forecast outturn for the financial year 2024/25.

Performance against the 2024/25 Budget within each service committee, and the Finance Sub-Committee was outlined in Table 1 of the report. The Council was forecasting an additional in-year pressure of £26.5m - this was before the application of any exceptional financial support.

It was noted that the report format had been changed so that one finance report with a single set of information would go to each service committee to enable them to consider and see the full financial position.

The Sub Committee asked about the funding of capital programme and in response it was stated that these schemes were funded through several ways, with some grant funded and others by borrowing. Costs would also occur in the revenue account as interest would need to be paid on the money borrowed.  Table 2 in the report provided an update on the capital programme cost against those set in the budget and the estimate costs for the next four years.  A full review of the capital programme was being undertaken as part of the actions to reduce the overspend.  Table 4 in the report set out the forecast borrowing included in the capital programme set out the interest charges on the borrowing and the impact on the revenue budget.

Members sought clarification on the reasons for the overspends in the Children Services and Adults budgets. It was stated that the overspends forecast were the expected overspends at the end of the year if nothing changed. The overspends arose from a number of factors as these services were demand led and more people than anticipated had come to the Council for support. This included an increase in the number of former self-funders seeking local authority funding to meet their care costs. Other factors included the increase in costs of providing care due to increases in the National Living Wag, an increase in the discharge activities from hospitals which affected the pricing and demand of adult social care, and a reduction in acute care beds which meant having to provide care for those with more complex care needs.

The Sub Committee, whilst noting that the Adults and Health Committee and the Children and Families Committee would be considering the first financial review for their areas, were concerned about the overspends and proposed that this be referred up to the Corporate Policy Committee to look at in more details, as these overspends were largely outside the remits of the MTFS.

It was noted that mitigation for the overspending included the selling assets, and it was stated that the Council had an asset disposal programme. The disposal of an asset resulted in a capital receipt, however the Council had to achieve best value for any sold.  The market value achieved may be less than the valuation of the asset.

RESOLVED:  That the Sub Committee

1               note the factors leading to a forecast adverse Net Revenue financial pressure of £26.5m against a revised budget of £387.6m (6.8%), the contents of Annex 1, Section 2 and the progress on the delivery of the MTFS approved budget policy change items, the RAG ratings and latest forecasts, and the actions taken to address any adverse variances from the approved budget.

2               note the in-year forecast capital spending of £164.5m against an approved MTFS budget of £215.8m, due to slippage that has been re-profiled into future years.    

3               note the available reserves position as per Annex 1, Section 5.

4               note the Capital Virements above £500,000 and up to an including £5,000,000 as per Annex1, Section 4, Table 3 will be approved in accordance with the Council’s Constitution.

5               note that Council will be asked to approve Supplementary Revenue Estimate Requests for Allocation of Additional Grant Funding over £1,000,000 as per Annex 1, Section 3. Table 1.

6               note that the Adults and Health Committee will be asked to approve the Supplementary Revenue Estimate Request for Allocation of Additional Grant Funding over £500,000 up to £1,000,000 as per Annex 1, Section 3, Table 2.

7               note that the Highways and Transport Committee will be asked to approve the Supplementary Capital Estimate above £500,000 up to and including £1,000,000 as per Annex 1, Section 4, Table 3.

8               the Finance Sub Committee recommend to the Corporate Policy Committee the examination of children services and adults as areas for consideration as their performance lies outside the parameters of the MTFS.

The meeting adjourned for a 5-minute break.