Issue - meetings

This report provides the quarter two 2023/24 projected financial outturn information for the general fund and housing revenue account (HRA).

The February 2023 approved general fund budget for 2023/24 was balanced on the assumption of a £30m drawdown in reserves and the delivery of £34m in savings, efficiencies, and additional resources including £9m in respect of transformation which were un-itemised.

Based on the current projections the Council is forecasting it will instead need to draw down £34.3m from unearmarked reserves (a further £4.3m) to balance the 2023/24 budget.

The orderly closure of BCP FuturePlaces Ltd could either reduce the drawdown of reserves by up £2.2m or increase the drawdown by a further £1.2m based on the report to Cabinet in September 2023. An estimate of the outcome should be available by January.

Mitigations are being progressed by directorates, including a spending and recruitment freeze where possible, but the risk remains that if these are unsuccessful then the council would be required to reduce its unearmarked reserves below the minimum threshold based on good practice.

Delivering to budget remains critical as the medium-term financial plan makes no allowance for replenishing any unearmarked reserves used to balance 2023/24 and there are no earmarked reserves available to support any drawdown over the £30m assumed in the original budget.

RESOLVED that Cabinet noted the budget monitoring position for quarter two 2023/24.

Voting: Unanimous

Reasons

To comply with accounting codes of practice and best practice which requires councils to regularly monitor the annual budget position and take any action to support the sustainability of the council’s financial position.

The Portfolio Holder for Finance presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'B' to these Minutes in the Minute Book.

Cabinet was advised that the report provided the quarter two 2023/24 projected financial outturn information for the general fund and housing revenue account (HRA).

In relation to this Cabinet was informed that February 2023 approved the general fund budget for 2023/24 which was balanced on the assumption of a £30m drawdown in reserves and the delivery of £34m in savings, efficiencies, and additional resources including £9m in respect of transformation which were un-itemised.

Cabinet was advised that based on the current projections the Council is forecasting it will instead need to draw down £34.3m from unearmarked reserves (a further £4.3m) to balance the 2023/24 budget.

Cabinet was advised that the orderly closure of BCP FuturePlaces Ltd could either reduce the drawdown of reserves by up to £2.2m or increase the drawdown by a further £1.2m based on the report to Cabinet in September 2023, and that an estimate of the outcome should be available by January.

In addition, Cabinet was informed that mitigations are being progressed by directorates, including a spending and recruitment freeze where possible, but that the risk remains that if these are unsuccessful then the council would be required to reduce its unearmarked reserves below the minimum threshold based on good practice.

In relation to this Cabinet was informed that delivering to budget remains critical as the medium-term financial plan makes no allowance for replenishing any unearmarked reserves used to balance 2023/24 and there are no earmarked reserves available to support any drawdown over the £30m assumed in the original budget.

The Portfolio Holder emphasised the significant in year pressures and the importance of having adequate reserves.

RESOLVED that Cabinet noted the budget monitoring position for quarter two 2023/24.

Voting: Unanimous

Portfolio Holder: Finance

Reasons

To comply with accounting codes of practice and best practice which requires councils to regularly monitor the annual budget position and take any action to support the sustainability of the council’s financial position.