Issue - meetings

This report:

·      Aims to ensure the council continues to maintain a balanced 2025/26 budget forecast by considering the impact that various assumptions would have on the underlying approved position. 

·      Proposes a financial strategy to support the delivery of a robust and financially sustainable budget for 2025/26. 

·      Proposes a budget planning process and timeline for key financial reports.

·       Presents the outcome of the CIPFA Financial Resilience Review undertaken in the summer/autumn of 2023 and finalised in the spring of 2024.

Presents a letter submitted by the Director of Finance to DLUHC and CIPFA outlining concerns regarding the impact the deficit on the Dedicated Schools Grant is having on the financial sustainability of the Council. This recognises that due to the forecast £92m accumulated deficit on the 31 March 2025 the council will be technically insolvent (a situation where the deficit on the DSG is greater than the total reserves held by the council with a negative overall general fund position) when the current statutory override finishes on 31 March 2026. This letter also highlighted the difficulties the council will have in setting a legally balanced budget for 2025/26 when it has exhausted its ability to cover the cost of the DSG deficit from its temporary short term treasury management cashflow headroom.

RESOLVED that Cabinet: -

(a)           Approve the budget timetable and process as set out in Appendix A;

(b)           Endorse the scenario planning exercise that guides the potential level of activity that may now be needed to present a legally balance budget for 2025/26;

(c)           Approve the financial strategy designed to support the ongoing delivery of a balanced 2025/26 Budget and MTFP as set out in Appendix B;

(d)           Note the outcome of the CIPFA Financial Resilience Review and associated action plan; and

(e)           Note the letter submitted by the Director of Finance to DLUHC and CIPFA outlining the challenge that the deficit on the Dedicated Schools Grant presents

Voting: Unanimous

Portfolio Holder: Finance

Reason

To comply with accounting codes of practice and best practice which requires councils to have a rolling multi-year medium term financial plan.

To provide Cabinet with the latest high-level overview of the medium-term financial plan.

To present a proposed financial strategy to support the ongoing delivery of a balanced budget for 2025/26.

To present the CIPFA Financial Resilience Review.

To present the letter submitted to DLUHC and CIPFA in regard to the difficulties presented by the accumulating DSG deficit.

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 sought to ensure that the council continued to maintain a balanced 2025/26 budget forecast by considering the impact that various assumptions would have on the underlying approved position. 

In relation to this Cabinet was advised that the report proposed a financial strategy to support the delivery of a robust and financially sustainable budget for 2025/26 and proposed a budget planning process and timeline for key financial reports.

In addition Cabinet was advised that the report presented the outcome of the CIPFA Financial Resilience Review undertaken in the summer/autumn of 2023 and finalised in the spring of 2024, and also presented a letter submitted by the Director of Finance to DLUHC and CIPFA outlining concerns regarding the impact the deficit on the Dedicated Schools Grant is having on the financial sustainability of the Council. Cabinet was informed that this recognises that due to the forecast £92m accumulated deficit on the 31 March 2025 the council will be technically insolvent (a situation where the deficit on the DSG is greater than the total reserves held by the council with a negative overall general fund position) when the current statutory override finishes on 31 March 2026, and that the letter also highlighted the difficulties the council will have in setting a legally balanced budget for 2025/26 when it has exhausted its ability to cover the cost of the DSG deficit from its temporary short term treasury management cashflow headroom.

The Chair of the Overview and Scrutiny Board, Councillor Stephen Bartlett addressed the Cabinet advising that at their meeting the previous evening whilst the Board hadn’t made any formal recommendations that the Board had raised concerns around the ongoing Dedicated Schools Grant (DSG) deficit and the risks around Carters Quay.

Cabinet spoke in support of the report praising officers and the Portfolio Holder for making savings where possible in sometimes difficult circumstances.

In addition Cabinet emphasised the importance of raising the matter of the DSG deficit as soon as possible with the new government to ensure this is dealt with early.

RESOLVED that Cabinet: -

(a)           Approve the budget timetable and process as set out in Appendix A;

(b)           Endorse the scenario planning exercise that guides the potential level of activity that may now be needed to present a legally balance budget for 2025/26;

(c)           Approve the financial strategy designed to support the ongoing delivery of a balanced 2025/26 Budget and MTFP as set out in Appendix B;

(d)           Note the outcome of the CIPFA Financial Resilience Review and associated action plan; and

(e)           Note the letter submitted by the Director of Finance to DLUHC and CIPFA outlining the challenge that the deficit on the Dedicated Schools Grant presents

Voting: Unanimous

Portfolio Holder: Finance

Reason

To comply with accounting codes of practice and best  ...  view the full minutes text for item 21