Agenda item

Report attached.

Members considered a joint report of Councillors Noordad Aziz, Joint Deputy Leader and Portfolio Holder for Transformation, Education and Skills and Vanessa Alexander, Portfolio Holder for Resources and Operations. The report informed Cabinet of the financial spending of the Council up to the end of the June 2024 for the financial year 2024/25 and the forecast impact on the Council’s Medium Term Financial Strategy for 2024/25 to 2026/27.

Councillor Aziz introduced the report and highlighted the potential pressures and risks in year set out at Paragraph 5 of the report. He also noted that interest rates remained high and this had had a positive effect on the Council’s Budget, due to monies invested from the Levelling Up Fund and the UK Shared Prosperity Fund, which had not yet been spent. There had, however, been some increased service costs around legal, projects and advice, which would have a negative impact on the Budget. Overall, an underspend of £184k was predicted at year end.

Approval of the report was not considered to be a key decision.

Reasons for Decision

At the Full Council meeting on 27^th February 2024, Council had agreed the General Fund Revenue Budget for 2024/25. This set a budget for the Council’s total spend in 2024/25 of £16.122M.

The current forecast spend to the end of the financial year in March 2025 was £15.938M. That brought the forecast underspend for the year against the budget to £0.184M.

Table 1: Actual Performance Against Budgets

Details of the most significant changes in the forecast variance were as shown in the table below.

Table 2: Main Changes in Forecast Variance

Section 4 of the report included further tables (Nos 3 to 11) on Variance by Service, which provided more detailed information on the areas identified in Table 1 above.

Reserves

The Council was currently forecasting a reduction of £15.295M in its usable reserves during the year, bringing them to £10.809M at the end of the year.  Movements in reserves were shown in Table 12 of the report, which is reproduced below.

Table 12: Forecast Movements in Reserves 2024/25

As shown in the table above, the most significant movements in reserves were the forecast spending on the capital programme.

Potential Pressures and Risks in Year

Although the forecast underspend at Quarter 1 stood at £0.184M, there were some real pressures and risks that needed to be considered that were not currently built into any financial forecasts.

The main pressures/risks related to the following items.

·         Waste Disposal Site/Transfer Station

·         Oswaldtwistle Civic Theatre

·         Crematorium/Cremators

·         Food Waste Collections

·         Hyndburn Leisure

A more comprehensive description of issues raised above was set out in the report.

These pressures/risks might need to be considered over the course of the Medium Term Financial Strategy against the forecast underspend for the year.

In addition, a pay award offer had been put forward by the National Employers. This was a flat rate of £1,290 (pro-rata for part time employees) for NJC scale points 2 to 43 inclusive and 2.5% for all other employees. For the Council this represented an average increase of just under 4%, compared to a 5% estimate included in the budget. Union members had been balloted on the proposed pay award and 2 out of 3 had voted to reject it, therefore, due to the uncertainty, no changes in relation to the pay award had been included in these forecasts.

There were no alternative options for consideration or reasons

Resolved                                 (1)   That Cabinet notes the report and asks Corporate Management Team to continue to monitor the financial position of the Council over the remaining months of the year.

(2)   That Cabinet notes the pressures and risks highlighted in Section 5 of the report and that regular updates will be provided on any potential impact on the current forecast underspend in year and the future Medium Term Financial Strategy.