Councillor Mark Lowry (Cabinet Member for Finance) introduced the report and highlighted the following points:

a)    The report covered 1 April 2023 to 30 September 2023;

b)    There had been a reduction in the overspend from £7.5 million to £4.76 million;

c)    Most of the issues reported at the previous meeting still existed, particularly within Children’s Services where there was a projected overspend of £6 million, equating to 10% of the original budget, and it was not sustainable, but work was being done with improvement partners to better understand the issues and to get some assurance that the measures in place were the best to contain the overspend;

d)    Other areas of overspend included homelessness and school transport for children with special educational needs;

e)    The capital monitoring position revised budget reflected an additional £18.6 million in 2023/24 financial year and a further £18.2 million for 2024/25 to 2027/28;

f)     He was working with officers on a review of the capital programme to ensure its affordability due to increases in interest rates.

The Chair added:

g)    The outturn report would be considered at the City Council meeting the following week;

h)    The report would also help inform the Budget Scrutiny Select Committee Review, scheduled for 6 and 7 December 2023.

In response to questions, supported by David Northey (Interim Section 151 Officer), it was explained:

i)     As a consequence of the COVID19 pandemic, a large number of businesses were unable to pay business rates, and the Government paid that money to the Council instead, but there was an outstanding deficit to the Council of £900,000, which the Council wrote to Government about and had now had paid;

j)     Future reports would include details on the changes that had been made since previous reports so show the variance in different budgets, not just the forecast net variance;

k)    £500,000 had been moved from revenue to capital following review of projects and finding parts of projects that could be included as capital and a detailed explanation of what had been moved would be provided to members;

l)     The Council tried to optimise the money it had in advance for the year to get the highest interest rate possible, and did the same for its reserves, and the treasury management team had overachieved and had been able to release £500,000 to the revenue budget, which would be detailed in the Treasury Management Half-Year Report which would be published shortly for the November meeting of the Audit and Governance Committee;

m)  An external commissioner had been appointed to assist the Council with regards to managing the Children’s Services budget and there had been a tremendous amount of progress, but there were still issues to resolve and there was a possibility that the area would see worsening overspend before the end of the financial year;

n)    David Northey was confident that the Council would reached a balanced budget by the end of the financial year.

The Committee agreed to;

1.   Note the forecast revenue monitoring position at Period 6 as set out in this report in the sum of £4.766m;

2.   Note that the Capital Budget 2023-2028 was revised to £629.924m as shown in Table 1 and recommended these amendments to City Council for approval.