Agenda item

To consider the financial performance information for the first quarter of 2023/24. 

That the financial performance information for the first quarter of 2023/24 be NOTED. 

31.1          The report of Associate Director: Finance, circulated at Pages No. 15-30, set out the financial update for quarter one of 2023/24 which Members were asked to consider.

31.2           The Lead Member for Finance and Asset Management indicated there was a lot of detail contained within the report and he intended to give a general overview of some of the key elements.  The overall position on the revenue budget position was a £55,000 deficit, as outlined at Paragraph 2.1 of the report, and he clarified this was showing the position for year end as opposed to the current actual situation.  The deficit was not a target the authority was aiming for when originally setting the budget, but he was of the view that this was a reasonable position to be in considering the many pressures affecting services including the ongoing struggle to recruit in key areas of the Council e.g. Planning and One Legal resulting in high agency costs as highlighted in the vacancy Key Performance Indicators (KPIs) within Appendix E to the report. The agency costs were approximately £50,000 more than was budgeted for; and as outlined at Paragraph 2.8 of the report, income had been reduced due to the decision to cease the trade waste service, along with some expected reductions in other areas; it was noted that this decision had been taken after the budget was set.  The report was based on expectations as at quarter 1; however, with a volatile economy further negative impacts could not be ruled out.  As an example, a significant issue was that the Council had budgeted for a 4% allowance for the staffing pay award for this year but, until it was settled, this remained one of the biggest risks to the budget.  Notwithstanding this, there was a reserve set aside in-year to cover any settlement in excess of the budgeted figure.  The Lead Member was aware that the report had been presented differently than in previous years in order to give a more accurate picture of the financial situation, so some Members may have queries about the format.  The capital budget, attached at Appendix B to the report, and the reserves position, attached at Appendix D to the report, showed that spending was in line within the approved budgets.  The local KPIs, attached at Appendix E to the report, had been included to add further context to the financial performance and a new requirement from the revised Chartered Institute of Public Finance and Accountancy (CIPFA) Prudential and Treasury Codes meant the Council must report its prudential indicators to the Executive Committee on a quarterly, rather than six-monthly, basis from this financial year, as set out at Appendices C and F to the report.

31.3           A Member drew attention to Paragraph 2.6 of the report which stated that the projected outturn for supplies and services highlighted a potential overspend of £14,000 and she sought confirmation that ways to reduce that were being considered.  The Associate Director: Finance advised that Officers were looking into ways to reduce stationery and departments such as Revenues and Benefits were moving to email letters where possible.  One of the main costs was the charges associated with people paying digitally for car parking.  The Associate Director: Transformation advised that 85% of garden waste customers had signed up to receive electronic billing and there was a drive for the Business Transformation Team to roll out automation across more services.  The Member pointed out that not everyone was able to access email so it would be necessary to find ways to support those people as well.  In response, the Associate Director: Transformation explained that pay points were available in the local communities so if people were not able to go online they could use the facilities in their communities - cash and cheque payments were the most expensive transactions for the Council.  The more customers who accessed services online, the more Officer time would be freed up to help those who could not.

31.4           With regard to corporate expenditure, a Member drew attention to Paragraph 2.9 of the report which stated there was an estimated deficit of £148,886 for the financial year, and Paragraphs 2.13 and 3.1 of the report, which showed that some money had not been spent and she asked what that was and why.  The Associate Director: Finance drew attention to the table at Paragraph 2.1 of the report and indicated there had been a reduction in relation to investment properties.  In addition, there was a savings target of £208,000 in relation to employment costs which was included every year for staff turnover and to assist with the budget.  In terms of external grant funding, this had been reported differently in the past which had inflated the figures so it was now included as a separate line to reflect that it was externally ringfenced funding for a particular project or service and there was no discretion as to how it could be spent.  The capital budget position was underspent as vehicles had not been purchased in this quarter; however, it was planned they would be acquired by the end of the financial year.  This was very strictly controlled and if any additional funding was required it would need to be approved by Council.  A Member noted from Appendix A to the report that there were 14 vacant posts in One Legal and sought clarification as to whether those costs were shared between all partners.  The Associate Director: Finance confirmed this was the total cost between all four authorities.

31.5           A Member drew attention to Paragraph 2.7 of the report which highlighted that the Materials Recovery Facility (MRF) was due to be over budget by £100,000 as a result of a significant increase in the gate fee per tonne and he asked whether that could have been predicted and what the gate fee was based on.  The Director: Communities advised it was down to the market and, like the majority of current forecasts, it was unpredictable due to inflation etc.  The Member sought clarification as to the savings which would be made from the cessation of the trade waste service and confirmation was provided that £100,000 would be saved annually assuming Ubico delivered all of the expected savings.  The Associate Director: Finance advised that this saving would be made in 2024/25; there would be a small deficit this year due to overheads.  With regard to Paragraph 2.11 of the report, a Member noted there was reduction in costs associated with managing the investment property portfolio and asked what that related to and how money had been saved.  The Executive Director: Resources explained that this related to management of an industrial complex in Tipton; since it had been bought by Alex Eagle it had been managed on the Council’s behalf and the authority now benefited from service charges on the estate.  In response to a further query regarding the property portfolio balance, Members were advised that the position as it stood was largely in line with estimates; it was expected to see a variance as the year went on but it was hoped that would be a positive one.  A Member asked whether there had been any changes to the figures in relation to central government funding and New Homes Bonus and the Executive Director: Resources advised that the figures were correct for this year but they were unknown for next year.

31.6           Accordingly, it was