Lead Member – Councillor Gwilym Butler, Portfolio Holder for Finance, Corporate Resources and Communities

Lead officer -  Ben Jay

RESOLVED:

That Cabinet Members:

In respect of the revenue budget:

a.     Noted that the outturn for overall variance in the year is £7.877m above budget

b.     Noted the consequent level of the General Fund balance is £8.237m.

c.     Noted the service-related use of £19.424m of Earmarked Reserves & Provisions and the resulting level of earmarked reserves of £35.407m (£26.551m if the balances held by schools are excluded).

d.     Noted the level of savings delivery achieved over the year

e.     Noted that the combination of earmarked and un-earmarked (General) reserves of £43.644m is below a level that would be regarded as safe, taking into account local circumstances. The MTFS sets out an agreed plan to restore these balances to safer levels.

Relating to ringfenced funding:

f.      Noted the performance of the Housing Revenue Account (HRA) – £0.623m (3%) deficit outturn for 2023/24 on £20.532m turnover, and the resulting level of the HRA reserve of £11.737m.

g.     Noted the outturn for the DSG and the consequent level of the DSG reserve.

h.     Noted that the level of school balances has decreased by £0.451m, from £7.791m in 2022/23 to £7.340m, in the financial year.

In respect of the capital programme:

i.       Approved net budget variations of £16.156m to the 2023/24 capital programme (in Appendix 10) and the re-profiled 2023/24 capital budget of £100.012m.

j.       Approved the re-profiled capital budgets of £117.776m for 2024/25, including slippage of £7.673m from 2023/24, £92.339m for 2025/26 and £48.873m for 2026/27 as detailed in Appendix 13.

k.     Accepted the outturn expenditure set out in Appendices 11 and 12 of £92.339m, representing 92.3% of the revised capital budget for 2023/24.

l.       Approved retaining a balance of capital receipts set aside of £15.175m as at 31st March 2024 to generate a one-off Minimum Revenue Provision saving of £0.420m in 2024/25.

The Portfolio Holder for Finance, Corporate Resources and Communities introduced the report which provided a detailed review of Shropshire Council 2023/24 financial performance for revenue and capital.

He highlighted the challenges and achievements of the previous financial year, the savings delivery, and the contingency plan of using reserves.

The finance team and the staff were thanked for their work.

Concern was expressed regarding the financial outturn, the use of reserves and level of overspend. It was also noted that the financial outturn had been raised within the performance report as an exception. The Portfolio Holder explained the difficulties of predicting the demand and inflation and advised that the overspend was only a small percentage of the gross and net budget, and that the council was transparent about the issues faced.

RESOLVED:

That Cabinet Members:

In respect of the revenue budget:

a.     Noted that the outturn for overall variance in the year is £7.877m above budget

b.     Noted the consequent level of the General Fund balance is £8.237m.

c.     Noted the service-related use of £19.424m of Earmarked Reserves & Provisions and the resulting level of earmarked reserves of £35.407m (£26.551m if the balances held by schools are excluded).

d.     Noted the level of savings delivery achieved over the year

e.     Noted that the combination of earmarked and un-earmarked (General) reserves of £43.644m is below a level that would be regarded as safe, taking into account local circumstances. The MTFS sets out an agreed plan to restore these balances to safer levels.

Relating to ringfenced funding:

f.      Noted the performance of the Housing Revenue Account (HRA) – £0.623m (3%) deficit outturn for 2023/24 on £20.532m turnover, and the resulting level of the HRA reserve of £11.737m.

g.     Noted the outturn for the DSG and the consequent level of the DSG reserve.

h.     Noted that the level of school balances has decreased by £0.451m, from £7.791m in 2022/23 to £7.340m, in the financial year.

In respect of the capital programme:

i.       Approved net budget variations of £16.156m to the 2023/24 capital programme (in Appendix 10) and the re-profiled 2023/24 capital budget of £100.012m.

j.       Approved the re-profiled capital budgets of £117.776m for 2024/25, including slippage of £7.673m from 2023/24, £92.339m for 2025/26 and £48.873m for 2026/27 as detailed in Appendix 13.

k.     Accepted the outturn expenditure set out in Appendices 11 and 12 of £92.339m, representing 92.3% of the revised capital budget for 2023/24.

l.       Approved retaining a balance of capital receipts set aside of £15.175m as at 31st March 2024 to generate a one-off Minimum Revenue Provision saving of £0.420m in 2024/25.

To scrutinise the Financial Outturn and identify issues that may require further investigation by an overview and scrutiny committee.

REPORT TO FOLLOW

Councillor Gwilym Butler, Portfolio Holder for Finance, Corporate Resources and Communities, introduced the report and gave his personal thanks to the finance team and wider organisation for what has been achieved to date.

The Executive Director of Resources provided an overview of the position. He mentioned that they had been able to contain expenditure within the budget and that there had been a lot of progress made in the last 12 months. However, the Council was not where it needed to be in terms of a finished article and that this would be progressed over the coming months.

Members discussed the level of overspend in various service areas. Members were advised that the main areas of overspend were in adult and children's social care, due to increased demand and inflationary pressures, which were partly mitigated by one-off funding and reserves.

Concern was raised regarding the housing and assets sections of the report and the overspend in those areas. The Assistant Director Finance and Technology responded that the housing and assets referred to the portfolio and that the overspend was in part due to demand pressure and in part due to the pace at which savings were able to be delivered during the course of the year.

Members acknowledged the need to deliver savings and transform service areas to ensure sustainability. They also talked about the importance of early intervention and prevention work to address the demand for services, particularly in adult and children’s social care.

It was stated that the council had a robust process of monitoring and managing the budget throughout the year, and had learned from the experience to improve the estimates and plans for 24/25. The council had a reasonable level of reserves going into 24/25, but still faced a huge challenge of delivering £62 million of savings and managing the demand and cost pressures in social care and other areas.

RECOMMENDED:

That members noted the report.