Agenda item

To consider the quarterly budget position.

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

58.1          The report of the Associate Director: Finance, circulated at Pages No. 15-39, highlighted the Council’s financial performance for the second quarter of 2023/24 which Members were asked to consider.

58.2          In introducing the report, the Lead Member for Finance and Asset Management advised that the overall revenue budget was a £257,000 positive position, as outlined in the table at Pages No.16-17, Paragraph 2.1 of the report; however, it was important to note this was showing the position for year end as opposed to the current actual situation and would no doubt change by the end of the year.  Some areas were predicting an overspend against budget whilst there were some corresponding higher levels of income than expected.  As reported in quarter one, along with the volatility of the economy generally, one of the biggest risks to performance against budget was the impending decision relating to the final pay award for staff which happily had now been resolved in line with the estimates used for building the budget.  In terms of other key details to bring to Members’ attention, services were £56,670 over budget - although employees was £529,000 under budget, £520,000 related to One Legal vacancies which was matched off by a reduction in third party income for their service; however, there was a target within the Council’s corporate expenditure to save £209,000 from employment costs across the Council which reduced the predicted underspend to £315,000.  Payments to third parties showed a £48,000 overspend which included an additional £233,000 against budget for the Materials Recovery Facility (MRF) gate fee due to a significant increase from £38 per tonne to £69 per tonne as a result of the declining value of materials and an increase in energy prices.  Emergency homeless accommodation costs were £52,000 over budget and, due to the high costs of temporary accommodation, an additional £189,000 was lost in housing benefits subsidy.  The cessation of the trade waste service would save money from 2024/25; this year it was anticipated to save £96,000 in expenditure but £197,000 income would be lost resulting in an overall loss of £101,000 which was reflected in quarter 2.  Swindon Road depot running costs were expected to be £108,000 less than budgeted for the year.  Corporate expenditure was underspent by £498,722 and there was an additional £235,000 treasury investment income compared to budget as a result of high interest rates.  Borrowing costs included an allowance for temporary borrowing; however, the Council only had the fixed Public Works Loan Board (PWLB) loans at present and did not expect to borrow any more during the remainder of the year leading to a saving of £206,000 with business rates currently anticipated to bring in an additional £167,000.  The capital budget and reserves position were set out at Appendices B and D to the report and showed that spending was in line within the approved budgets.  Local Key Performance Indicators (KPIs) had been included at Appendix E to the report 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 required the Council to report prudential indicators on a quarterly, rather than six-monthly, basis from this financial year which were included at Appendices C and F to the report.

58.3          A Member expressed the view that the report reflected that the Council’s budgeting seemed to be working and there appeared to be good control over all types of expenditure, particularly treasury management which was generating a positive outcome; going forward it was likely that a lot would change but overall it was an encouraging position. It was subsequently proposed, seconded and