To provide a general update and overview of the Council’s financial position against the 2024/25 budget as at the end of December 2024 and looking ahead to 2025/26 and beyond.

RESOLVED that Cabinet –

(a)   notes the Council’s in-year financial position at the end of December 2024 along with the latest financial forecast update;

(b)   approves the proposed adjustments to the 2024/25 budget as set out in Appendix H to the Portfolio Holder’s report (A.5);

(c)   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;

(d)   in respect of the additional sum of £0.250m made available to support the delivery of savings / efficiency plans and wider corporate priorities that is set out in Appendix H, authorises the Chief Executive, in consultation with the Portfolio Holder for Corporate Finance and Governance to utilise this funding to support any associated work and activities; 

(e)   notes the financial forecast update set out in this report (A.5) and requests Officers, in consultation with Portfolio Holders to further develop the forecast and associated savings and efficiency plans for presenting to Cabinet later in 2025/26;

(f)    in respect of the budget for 2025/26, authorises the Corporate Director (Place and Economy), in consultation with the Portfolio Holders for Leisure and Public Realm and Corporate Finance and Governance to adjust the sports and leisure facilities budgets as necessary to better reflect the current experienced income and expenditure positions, but with no net overall impact on the Council’s wider budgeted position; and

(g)   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.

Cabinet considered a detailed report of the Corporate Finance and Governance Portfolio Holder (A.5) which provided a general update and overview of the Council’s financial position against the 2024/25 budget as at the end of December 2024 and looking ahead to 2025/26 and beyond.

SECTION 1 - In respect of the in-year financial position at the end of December 2024:

It was reported that the position to the end of December 2024, as set out in more detail within the appendices, showed that overall, the General Fund Revenue Account was overspent against the profiled budget by £0.294m (£0.724m at the end of September 2024). However, it was highlighted that this position continued to primarily reflect the timing of when the Government reimbursed the Council for the cost of meeting housing benefit claims and the parliamentary election expenses incurred earlier in the year.

Cabinet was made aware that in terms of proposed in-year adjustments to the budget, Appendix H set out a limited number of largely unavoidable cost pressures, along with reflecting some favourable issues emerging in the second half of the year to date. 

It was proposed that the overall net impact of the proposed budget adjustments set out in Appendix H would be adjusted against the Corporate Investment Fund. In terms of the proposal to set aside money to support the delivery of the Council’s savings and efficiency plans and wider corporate priorities as set out within Appendix H, a recommendation was included within the Portfolio Holder’s report (A.5) to provide for a delegation to the Chief Executive, in consultation with the Portfolio Holder for Corporate Finance and Governance to utilise that funding.

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

Members were informed that a recommendation had been included within the report (A.5) to provide for a delegation to the Corporate Director (Place and Economy), in consultation with the relevant Portfolio Holders to adjust the 2025/26 budgets for sport and leisure facilities to respond to the favourable income position currently being experienced across the various centres. Further details were set out in Appendix B.

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

Members were aware that as highlighted in the report to Full Council on 11 February 2025, future year’s estimated annual deficits remained significant against the context of the Council’s overall net budget.

In terms of the later years of the forecast, it was highlighted that there were significant challenges arising from inflationary increases, which were expected to exceed the Council’s ability to raise income from council tax and business rates over the long-term plan.  Therefore, at some reasonable point in the future, the Council must be able to put itself in the position of balancing its annual budget, otherwise the position was not sustainable.

Set against this position, it was also acknowledged that there would be further impacts from the Government’s proposals relating to changes to the Local Government Finance Settlement and ‘reset’ of the business rates retention model. In addition, Devolution and Local Government Reorganisation would also make financial planning even more challenging over the forecast period. Such issues would need to remain highlighted within the forecast risk assessment that accompanied the wider forecast and further updates would be provided during 2025/26 as necessary.

It was reported that notwithstanding the above, the Council’s long-term plan and Forecast Risk Fund provided flexibility and support, against which the development of the Council’s forecast could be considered, and it continued to provide the time and opportunity to respond to the structural annual budget deficits and changes highlighted above.

Cabinet was reminded that the challenges faced by the Housing Revenue Account also remained significant and included increased expectations and requirements that continued to emerge from the Social Housing Regulation Act and associated enhanced powers of the Housing Regulator. The HRA 30 Year Business plan would be developed over the coming months alongside a review of the announcements included within the Government’s recent Autumn Budget Statement 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 considered the financial position for the Council and to respond to emerging issues in 2024/25 along with developing the budget and long-term forecast from 2025/26:-

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

RESOLVED that Cabinet –

(a)   notes the Council’s in-year financial position at the end of December 2024 along with the latest financial forecast update;

(b)   approves the proposed adjustments to the 2024/25 budget as set out in Appendix H to the Portfolio Holder’s report (A.5);

(c)   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;

(d)   in respect of the additional sum of £0.250m made available to support the delivery of savings / efficiency plans and wider corporate priorities that is set out in Appendix H, authorises the Chief Executive, in consultation with the Portfolio Holder for Corporate Finance and Governance to utilise this funding to support any associated work and activities; 

(e)   notes the financial forecast update set out in this report (A.5) and requests Officers, in consultation with Portfolio Holders to further develop the forecast and associated savings and efficiency plans for presenting to Cabinet later in 2025/26;

(f)   in respect of the budget for 2025/26, authorises the Corporate Director (Place and Economy), in consultation with the Portfolio Holders for Leisure and Public Realm and Corporate Finance and Governance to adjust the sports and leisure facilities budgets as necessary to better reflect the current experienced income and expenditure positions, but with no net overall impact on the Council’s wider budgeted position; and

(g)   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.