Decision:
The Executive Mayor and Cabinet, RESOLVED to;
2.1 to note the General Fund revenue budget outturn is forecast to overspend at financial year end by £17.6m at Period 6, after the budgeted utilisation of £38m capitalisation directions requested from the Ministry of Housing, Communities and Local Government (MHCLG), utilisation of the £5.0m risk contingency budget and utilisation of £13.0m corporate earmarked reserves.
2.2 to note that all service directorates have been asked to reduce their net expenditure so that the annual budget can be balanced at the end of the year through the in-year Financial Recovery Plan as set out from paragraph 4.9.
2.3 to approve inter-directorate virements from Corporate to service directorates for pay inflation (£6.768m) (para 4.116).
2.4 to note the progress in Medium Term Financial Strategy (MTFS) savings achievement of £21.9m (79.1%) against the total savings target of £27.7m as set out in paragraph 4.138.
2.5 to note the work that is continuing on the Council’s Transformation Programme as set out from paragraph 4.136.
2.6 to note the Housing Revenue Account (HRA) revenue budget outturn is forecast to overspend by £8.0m.
2.7 to note the General Fund capital programme 2024-25 forecast underspend of £23.2m against the revised capital budget of £118.5m.
2.8 to note the HRA capital programme 2024-25 forecast underspend of £8.3m against the capital budget of £57.2m.
2.9 to note the Council’s historic borrowing and subsequent debt burden continues to be critical to the non-sustainability of the Council’s revenue budget as set out from para 4.159. Dialogue with MHCLG continues around options of further financial support from Government in regard to the level of structural indebtedness to ensure the Council can deliver sustainable Local Government services.
2.10 to note that the Council continues to operate Spend Control Panels, and tightened the criteria from July 2024, to ensure that stringent financial control and assurance oversight are maintained.
2.11 to note that current forecasts are based on the best available information at the time and will be subject to review and change during the financial year.
Minutes:
The Executive Mayor introduced the report, noting the slight improvement to the Council’s financial position from Period 5. In-year Financial Recovery Plans were underway and £21.9m in savings have been delivered this year.
Cabinet Member for Finance, Councillor Jason Cummings advised the report detailed a £2.2 million improvement to the forecast variance for year end. This was based on small improvements in the Resources and SCRER directorates and £1.2 million corporately. Demand led pressures were ongoing in Housing, Children's and more recently in Adult Social Care.
Shadow Cabinet Member for Finance, Councillor Callton Young noted the forecast overspend remained at £17.6 million overall, despite utilisation of £13 million earmarked reserves and £5 million contingency reserves. External demand pressures had meant some departments were stuck with overspends; Children's (£13.9 million), Housing (£15.7 million) and SEN Transport (£6 million). It was asked whether it was unfair to expect departments to make additional savings and whether there were further plans to utilise earmarked reserves and if so what risks this would pose to the Council.
The Executive Mayor responded confirming the ‘One Council ‘approach to the financial recovery plans. Despite improved stability at Croydon the financial challenges were significant this year.
Section 151 Officer and Corporate Director of Resources, Jane West advised there were other areas which could be considered for spend reductions without impacting services to residents. Similar pressures were being seen across London and Croydon's improved financial data had supported good understanding of the issues. Other options to achieve a balanced budget by year end included further capitalisation, potential use of revenue reserves, the risks to further utilisation of reserves were noted. The Corporate Management Team and organisation remained focussed on reducing the in-year overspend.
Cabinet Member for Finance, Councillor Jason Cummings challenged the language of departments being stuck with overspends and advised it was a significant effort for departments to hold the current the overspend position and highlighted the financial recovery plan and actions being taken by departments detailed within the report.
The Executive Mayor and Cabinet, RESOLVED to;
2.1 to note the General Fund revenue budget outturn is forecast to overspend at financial year end by £17.6m at Period 6, after the budgeted utilisation of £38m capitalisation directions requested from the Ministry of Housing, Communities and Local Government (MHCLG), utilisation of the £5.0m risk contingency budget and utilisation of £13.0m corporate earmarked reserves.
2.2 to note that all service directorates have been asked to reduce their net expenditure so that the annual budget can be balanced at the end of the year through the in-year Financial Recovery Plan as set out from paragraph 4.9.
2.3 to approve inter-directorate virements from Corporate to service directorates for pay inflation (£6.768m) (para 4.116).
2.4 to note the progress in Medium Term Financial Strategy (MTFS) savings achievement of £21.9m (79.1%) against the total savings target of £27.7m as set out in paragraph 4.138.
2.5 to note the work that is continuing on the Council’s Transformation Programme as set out from paragraph 4.136.
2.6 to note the Housing Revenue Account (HRA) revenue budget outturn is forecast to overspend by £8.0m.
2.7 to note the General Fund capital programme 2024-25 forecast underspend of £23.2m against the revised capital budget of £118.5m.
2.8 to note the HRA capital programme 2024-25 forecast underspend of £8.3m against the capital budget of £57.2m.
2.9 to note the Council’s historic borrowing and subsequent debt burden continues to be critical to the non-sustainability of the Council’s revenue budget as set out from para 4.159. Dialogue with MHCLG continues around options of further financial support from Government in regard to the level of structural indebtedness to ensure the Council can deliver sustainable Local Government services.
2.10 to note that the Council continues to operate Spend Control Panels, and tightened the criteria from July 2024, to ensure that stringent financial control and assurance oversight are maintained.
2.11 to note that current forecasts are based on the best available information at the time and will be subject to review and change during the financial year.
Supporting documents: