Agenda item

Period 3 2023-24 Financial Performance Report

Meeting of Cabinet, Wednesday, 27th September, 2023 6.30 pm (Item 54/23)

Decision:

RESOLVED:

1.1. To note the General Fund revenue budget outturn is forecast to breakeven at Period 3, after the forecast utilisation of £63m capitalisation directions requested from DLUHC and £4.5m of the corporate risk contingency budget. It is not planned to utilise the risk contingency budget and directorates will work to bring the service directorate positions within budget.

1.2. To approve within budget inter-directorate virements from Corporate to service directorates for non-pay inflation (£20.698m) (para 4.70), economic demand pressures (£1.716m) (para 4.72), Independent Living Fund (ILF) grant now included in the Social Care Grant (£0.960m) (para 4.68), and the transfer of equal grant income and expenditure budgets for the Adult Social Care Discharge Fund and the Market Sustainability & Improvement Fund (net nil budget change) (para 4.68).

1.3. To note the progress in MTFS savings achievement as set out in paragraph 4.82.

1.4. To note the work that has commenced on the Council’s Transformation Programme as set out from paragraph 4.77.

1.5. To note the Housing Revenue Account (HRA) revenue budget outturn is forecast to overspend by £3.8m.

1.6. To note the General Fund capital programme 2023-24 forecast underspend of £2.8m against the revised capital budget of £144.3m.

1.7. To note the HRA capital programme 2023-24 forecast overspend of £4.1m against the revised capital budget of £33.2m.

1.8. To note the Council’s historic legacy borrowing and debt burden continues to be critical to the sustainability of the Council’s revenue budget. Dialogue with the Department for Levelling Up, Housing and Communities (DLUHC) continues, and the Council is seeking further financial support from Government in regards to its level of indebtedness and balancing the budget to ensure it can deliver sustainable local government services.

1.9. To note that the Council continues to operate Spend Control Panels to ensure that tight financial control and assurance oversight are maintained.

Minutes:

The Executive Mayor introduced the Period 3 2023-24 Financial Performance Report, which remained on track for a balanced budget.

The Cabinet Member for Finance, Councillor Jason Cummings, addressed Cabinet that there had been no change for the balance position overall. Though the Children and Young People department continued to forecast an overspend, which was a result of placement costs and staffing overspend. Work was ongoing to mitigate the overspend, and such overspend was widespread across the wider local government sector. Croydon was in a position to forecast a balanced year-end position by sing part of the contingency reserves set aside for such circumstances.

The Shadow Cabinet Member for Finance, Councillor Callton Young, raised a questioning asking what assessments had been made with the risk associated with continuing vacancies should they persist, what were the plans to bring overspending services back on track and the resolution of high placement costs. Further, what could be said of the options being prepared by the council for government in place of the original plan to write off debt.

The Executive Mayor responded that there were a wide range of options and ongoing conversations with government. With the Period 3 report, there was ongoing mitigating overspend. The Cabinet Member for Finance, Councillor Jason Cummings, added that the potential risks relating to vacancy levels across council was varied between departments and regular communications were held in relation to this. Further, the spending of placement costs was under intense review which related to the necessary spend for extremely vulnerable individuals and complex circumstances, and the council always sought to find the best value and reviewed provision to ensure appropriateness. In relation to the staffing overspend, this was currently under review to be reflected in future reports.

The Leader of the Opposition, Councillor Stuart King, asked a question relating to the progress being made following conversations with government concerning the council’s debt, and should the council not secure a debt write off before the budget setting for 2024-25, the council would need to revert to a Plan B to balance the budget. Further could residents be reassured that threshold increase in council tax would be ruled out as part of the budget setting proposals for 2024-25.

The Executive Mayor responded that as part of the conversations a number of measures were being reviewed, secondly the council tax cap was a one-off increase, to which the council would not go through the council tax cap again as a local authority. The Cabinet Member for Finance, Councillor Jason Cummings, added that the Plan B consideration was incorrect, and the data held within the MTFS was based on forecast of a deal not received from central government, and predicted the use of capitalisation directed each year to meet the gap which was not sustainable long term. The Plan A consideration focused on the long-term stability of the council and planning for the position tabled to control.

The Executive Mayor in Cabinet RESOLVED: