To consider the attached Quarter 2 Budget Monitoring Report 2023/24.
The Chief Financial Officer presented the Budget Monitoring report for quarter 2 of 2023/24, to the Committee, and highlighted several key points based on the position at 20 September 2023.
· The General Fund, revenue, had a forecast budget overspend of £1.307 million. High interest rates were the most significant factor to the forecast position. Service pressures were limited at this stage, although there was an anticipated shortfall of £0.935 million in Planning fee income and there was a risk associated with employee costs pending agreement of the national pay award. The funding position was mixed; a surplus income of £646,000 was expected from Business Rates and a shortfall of £225,000 anticipated on the payments that the Council receives from preceptors as part of the Essex Council Tax Sharing Agreement (CTSA). The forecast outturn balance was £1.883 million, significantly below the Council’s formally adopted contingency balance of £4.0 million.
· The HRA account was projected to record a small budget overspend of £0.013 million; increasing costs of major void repairs was a pressure. The outturn balance was forecast at £4.584 million, above the minimum contingency balance of £2.0 million in the HRA Business Plan.
· Capital spending was subdued, the drawdown of Qualis loans was the biggest factor behind the forecast underspend of £13.9 million on the general fund and £35.8 million on HRA.
· Wider financial performance and risk indicators were detailed.
· raised several queries and received clarity that staff vacancies would be expected in any year, and any associated underspend could be used to respond to and manage the in- year overspend, depending on the service need.
· were advised that there was a recovery plan for local tax collection. There was a cyclical nature to collection, but a higher rate of collection was anticipated fin this financial year.
· requested transparency on any specific in year budget proposals and mitigation strategies being developed by Service in relation to the in-year budget pressures.
· were assured that planning applications were being encouraged to be brought forward to mitigate the income shortfall
· discussed the impact of interest rates on loans and the impact on development through Qualis.
The Leader of the Council advised the Committee that budget process would be difficult and tough decisions would be needed, the scrutiny of any proposals would be essential.
The Overview and Scrutiny committee noted:
1. The General Fund revenue position at the end of Quarter 2 for 2023/24, including actions being undertaken or proposed to ameliorate the position where significant variances have been identified.
2. The General Fund capital position at the end of Quarter 2 for 2023/24.
3. The Housing Revenue Account revenue position at the end of Quarter 2 for 2023/24, including actions proposed to ameliorate the position, where significant variances have been identified.
4. The Housing Revenue Account capital position at the end of Quarter 2 for 2023/24; and
5. The wider position on Financial Performance and Risk at the end of Quarter 2 be noted.
1) Detailed breakdown of the underspend of the ‘Bricks and Mortar Scheme’ would be circulated _ chief Finance Officer.