Agenda item

To provide a general update and overview of the Council’s financial position against the 2023/24 budget and looking ahead to 2024/25 and beyond.

RESOLVED that Cabinet -

 

(a)     notes the Council’s in-year financial position at the end of December 2023 along with the latest financial update / forecast;

 

(b)     approves the proposed adjustments to the 2023/24 budget, as set out in Section 1 and 2 of Appendix H;

 

(c)     approves the proposed adjustments to the 2024/25 budget, as set out in Section 3 of Appendix H;

 

(d)     subject to b) and c) above, requests Officers to review any potential longer term / on-going impact of the items set out in Appendix H, as part of developing the forecast for further consideration by Cabinet later in the year;

 

(e)     requests an update on the two carry forward items set out in this report, that were previously requested by Cabinet at its 10 November 2023 meeting, for inclusion in the Outturn Report for 2023/24;

 

(f)      subject to (b) above, agrees an exemption from the Council’s Procurement Rules in order to enable BDO to be engaged to undertake the necessary audit work relating to the Housing Benefit Subsidy Certification process for 2021/22, 2022/23 and 2023/24 and approves their appointment;

 

(g)     notes the funding made available via the second round of Sport England’s Swimming Pool Support Fund and:-

 

(i)   accepts the funding of £0.136m awarded to the Council along with noting the terms of the associated grant agreement that requests the Council to operate the facility for a period of three years from the date of the agreement unless otherwise agreed by Sport England;

 

(ii)   agrees that the approval of the necessary governance arrangements be delegated to the Corporate Director (Place and Economy), in consultation with the Leader of the Council and the Council’s Monitoring Officer and Section 151 Officer, and that such arrangements aim to protect the Council as far as reasonably possible within the context of the responsibilities the Council may have in administering the grant funding along with any transfers of money to the independently operated Brightlingsea Lido;

 

(h)     subject to (c) above, agrees a delegation to the Corporate Director (Operations and Delivery), in consultation with the Portfolio Holder for the Environment to utilise the additional proposed budget of £0.100m to support the work associated with the options appraisal / tender activities for the Waste and Street Cleansing Contract;  

 

(i)      agrees a delegation to the Corporate Director (Place and Economy), in consultation with the Council’s Section 151 Officer, to determine the mix of funding (from the Council’s own approved contribution and the money made available by the Government) to support both the LUF Scheme in Clacton and the CRP Scheme in Dovercourt, within financial parameters previously agreed and until the next significant project milestones are reported to Cabinet; and  

 

(j)      invites the views of the Resources and Services Overview and Scrutiny Committee on the information set out in this report along with the Council’s wider financial position as part of its work programme for the year.

Earlier on in the meeting, as detailed under Minute 110 above, Councillor Barry had declared a Disclosable Pecuniary Interest in the subject matter of this item insofar as he was a Trustee of the Brightlingsea Lido and given also that Brightlingsea Lido was mentioned at several junctions within the Portfolio Holder’s report (including its recommendations to Cabinet). Councillor Barry therefore withdrew from the meeting and left the room whilst Cabinet deliberated this matter and reached its decision.

 

Also in relation to the Brighlingsea Lido, Councillor Chapman declared an Other Registrable Interest insofar as she was also a Member of Brightlingsea Town Council.

 

During the discussion of the North Essex Parking Partnership potential budget deficit, Councillors P B Honeywood and M E Stephenson each declared an Other Registrable Interest insofar as they were both also members of Essex County Council.

 

Cabinet considered a detailed report of the Corporate Finance & Governance Portfolio Holder (A.2), which provided it with a general update and overview of the Council’s financial position against the 2023/24 budget and looking ahead to 2024/25 and beyond.

 

The report was split over two distinct sections as follows:

 

1)      The Council’s in-year financial position against the budget at the end of December 2023;

 

2)      A long term financial forecast update

 

As this report was presented later than in previous years, it had been felt timely to also focus on the estimated outturn position and not just the position at the end of Quarter 3, as well as looking ahead to a number of early changes to the budget in 2024/25. Section 1 of the report therefore reflected on those issues as well as their inclusion in Appendix H accordingly.

 

SECTION 1 - In respect of the in-year financial position at the end of December 2023:

 

It was reported that the position to the end of December 2023, as set out in more detail within the appendices, showed that overall the General Fund Revenue Account was underspent against the profiled budget by £3.823m. This was primarily due to the timing of expenditure and income in addition to the items set out in Appendix H. 

 

Cabinet was informed that, as was the case at the end of Quarter 2, there were only a limited number of variances that had developed during the second half of the year, given the various adjustments already ‘built’ into the 2023/24 base budget along with the changes highlighted at the end of the first two quarters of the year. However, those additional issues that had emerged or developed further during the second half of the year were discussed in more detail within the Portfolio Holder’s report.

 

In respect of other areas of the budget such as the Housing Revenue Account, capital programme, collection performance and treasury activity, additional details were also set out later on in the Portfolio Holder’s report where necessary.

 

Members were reminded that any emerging issues would be monitored and updates provided in future reports, which would include their consideration as part of updating the long-term financial forecast where necessary.

 

Cabinet was advised that a limited number of in-year budget adjustments were proposed as set out in Sections 1 and 2 of Appendix H, with an associated recommendation also included within the report. The same appendix also set out a number of proposed budget adjustments in 2024/25, which reflected the impact from decisions relating to fees and charges along with identification of a number of additional cost pressures.

 

Members were aware that the overall net impact of the proposed budget adjustments set out in Appendix H would be adjusted against the Forecast Risk Fund.

 

It was reported that one of the proposed adjustments in Appendix H related to External Audit Fees. It was proposed to appoint BDO (the Council’s outgoing External Auditors), via a procurement exemption, to undertake the necessary certification of three housing benefit subsidy returns to the Government.

 

Cabinet was aware that the Council had been awarded further funding as part of the second round of the Swimming Pool Support fund made available by Sport England. Additional details were set out later in the report (along with the necessary budget adjustment included within Appendix H), with an associated recommendation to accept the funding and seek the necessary delegations to undertake the required governance activities.

 

As previously requested by Cabinet, it was proposed to provide updates against two carry forwards from 2022/23 relating to the HR and Career Track Services. As set out elsewhere in the report, as work was underway to finalise the outturn position for the year, it was now proposed to provide an update that reflected the final position for the year, which would be reported to Cabinet in June / July. A recommendation had been included to reflect that proposed approach.

 

Although subject to the approval of the adjustments set out in Appendix H, it was proposed to allocate a further £0.100m to support the work associated with the options appraisal / tender of the Waste and Street Cleansing Contract. Additional details were set out elsewhere in the report along with an associated delegation included within the recommendations.

 

A further recommendation had also been included to provide the necessary flexibility regarding the allocation of funding to the Levelling Up Fund project in Clacton and the Capital Regeneration Programme project in Dovercourt.  Additional details were set out elsewhere in the report which highlighted that no additional funding was being requested at this stage, but simply an associated delegation to enable the most advantageous allocation of funding from within the overall project budgets.

 

SECTION 2 - In respect of the long term financial forecast update:

 

It was reported that there had been no changes made to the forecast position considered by Full Council on 13 February 2024 as part of agreeing the detailed budget. Cabinet was reminded however that future year’s estimated annual deficits remained significant against the context of the Council’s overall net budget. However, along with the forecast risk fund, the forecast / budget considered by Full Council on 13 February 2024 had provided flexibility in terms of developing the required framework in which to identify the necessary savings to support an on-going financially sustainable position over the next few years and in turn the time to make better-informed decisions.

 

It was important to highlight that, based on the latest forecast, the Forecast Risk Fund still remained in a surplus position to support the Council’s financial position over the period from 2024/25 to 2026/27.

 

Cabinet was advised that the level of time and resources required to not only develop the above framework but to deliver the required savings, should not be underestimated, especially when set against other existing commitments such as delivering the Levelling Up projects and Freeport East. There therefore needed to be a clear focus on the timely development of the plan whilst managing competing resources over the coming months.

 

As mentioned in previous reports, consideration would be given to extending the current forecast period beyond 2026/27 during the year, as the long-term forecast approach still provided an effective method of managing financial risks, and remained underwritten by the Forecast Risk Fund.

 

Members were reminded that the primary risks to the forecast remained as in earlier forecast reports and those related to the successful delivery of the necessary savings alongside the management of emerging cost pressures.

 

Cabinet was cognisant that the challenges faced by the Housing Revenue Account also remained significant and included increased expectations and requirements that were emerging from the Social Housing Regulation Act and associated enhanced powers of the Housing Regulator. The HRA 30 Year Business Plan would continue to be developed over the coming weeks and months with the aim of responding to such challenges set against the wider context of continuing to provide a financially sustainable position in the long term.

 

Having duly considered the financial position for the Council and in order to respond to emerging issues in 2023/24 along with developing the budget and long term forecast from 2024/25:-

 

It was moved by Councillor M E Stephenson, seconded by Councillor Kotz and:-

 

RESOLVED that Cabinet -

 

(a)     notes the Council’s in-year financial position at the end of December 2023 along with the latest financial update / forecast;

 

(b)     approves the proposed adjustments to the 2023/24 budget, as set out in Section 1 and 2 of Appendix H;

 

(c)     approves the proposed adjustments to the 2024/25 budget, as set out in Section 3 of Appendix H;

 

(d)     subject to b) and c) above, requests Officers to review any potential longer term / on-going impact of the items set out in Appendix H, as part of developing the forecast for further consideration by Cabinet later in the year;

 

(e)     requests an update on the two carry forward items set out in this report, that were previously requested by Cabinet at its 10 November 2023 meeting, for inclusion in the Outturn Report for 2023/24;

 

(f)      subject to (b) above, agrees an exemption from the Council’s Procurement Rules in order to enable BDO to be engaged to undertake the necessary audit work relating to the Housing Benefit Subsidy Certification process for 2021/22, 2022/23 and 2023/24 and approves their appointment;

 

(g)     notes the funding made available via the second round of Sport England’s Swimming Pool Support Fund and:-

 

(i)   accepts the funding of £0.136m awarded to the Council along with noting the terms of the associated grant agreement that requests the Council to operate the facility for a period of three years from the date of the agreement unless otherwise agreed by Sport England;

 

(ii)   agrees that the approval of the necessary governance arrangements be delegated to the Corporate Director (Place and Economy), in consultation with the Leader of the Council and the Council’s Monitoring Officer and Section 151 Officer, and that such arrangements aim to protect the Council as far as reasonably possible within the context of the responsibilities the Council may have in administering the grant funding along with any transfers of money to the independently operated Brightlingsea Lido;

 

(h)     subject to (c) above, agrees a delegation to the Corporate Director (Operations and Delivery), in consultation with the Portfolio Holder for the Environment to utilise the additional proposed budget of £0.100m to support the work associated with the options appraisal / tender activities for the Waste and Street Cleansing Contract;  

 

(i)      agrees a delegation to the Corporate Director (Place and Economy), in consultation with the Council’s Section 151 Officer, to determine the mix of funding (from the Council’s own approved contribution and the money made available by the Government) to support both the LUF Scheme in Clacton and the CRP Scheme in Dovercourt, within financial parameters previously agreed and until the next significant project milestones are reported to Cabinet; and  

 

(j)      invites the views of the Resources and Services Overview and Scrutiny Committee on the information set out in this report along with the Council’s wider financial position as part of its work programme for the year.