To note:

i)               the forecast revenue outturn for the year is an overspend on services of £4.900m which reduces to an overspend of £1.520m when including unallocated contingency budgets and changes to funding budgets (para 4).

ii)              that the Council’s approach to in-year budget monitoring and management is being strengthened – as part of a wider approach to improving corporate governance at RBWM - as set out in paragraph 5.1.

iii)             the forecast capital outturn is expenditure of £70.325m against a budget of £87.695m (para 10); and

iv)            agrees the virement in paragraph 11.4 to fund the additional capital costs of £0.101m for the Berkshire Records Office.

Cabinet considered the report titled ‘2023/24 Month 2 Revenue Monitoring Report’.

Councillor Jones introduced the item to Cabinet by stating that the overspend needed to be immediately addressed. There were growing costs on services such as Adult Social Care, which were currently forecasting a £2.8 million overspend on services.

The Children’s Services overspend was much lower at £50,000, however there were still pressures. The Place directorate were forecasting a £2.5 million overspend for reasons such as a decrease in parking season ticket sales, higher contract costs and higher costs for recycling. There was an underspend currently within the Resources directorate of £500,000, however these were more related to staff vacancies. Staffing was noted as being a huge issue across the Council, with services not being fully staffed, this was affecting the service delivery. High inflation and interest rates were also affecting all Council services. The debt of the Council also needed to be addressed. 

Stephen Evans, Chief Executive, said that work had already begun to balance the budget. The reserves that the Council had did not quite cover the projected overspend that was currently being forecast. The in-year position for the current financial year showed a forecast overspend of £4.9 million as of May 2023. The forecast budget gap for the next financial year of 2024/25 was currently showing a gap of £3.7 million with a total forecast gap to 2028/29 of £10.1 million.

Stephen Evans admitted that a budget gap of this size would be very challenging to manage, and he admitted that tough decisions would be required. He shared the concern of staffing levels in some services across the Council especially in some corporate services such as contract management and procurement. He then outlined some of the things that he had implemented at the Council since he became Chief Executive in April 2023. This included a new senior officer performance and resources board which had been established to scrutinise budgets and opportunities. He admitted that capacity and funding unfortunately did limit the Council.

The Chair said that the Council’s financial position was shocking and that it was a result of the previous administration’s legacy. Insourcing, commercialisation, using the Council’s assets and contract management in terms of staffing levels were all areas that were to be focussed upon by the new administration.

Andrew Vallance, Deputy Director of Finance said that the new regime for monitoring was being implemented as discussed by Stephen Evans and outlined some of the timelines that Cabinet would expect to see these reports.

Councillor Price asked as a non-Cabinet Member about the Cabinet Transformation Sub-Committee. She said that she would always attend it as she believed it to be very important, however admitted that no real transformation was seen from it along with it constantly being cancelled. She asked if it was to be continued & if it could be utilised as a driver for this. Stephen Evans replied by saying that the Council were not currently at a position to focus upon this, however welcomed it in the future.

Councillor Price said that community groups within the borough were too struggling financially and pleaded with the Cabinet to assist them as they were a wonderful asset that was available to the Council and that they should be utilised. Recognition was needed that they required support in order for the Council to make use of their services.

Councillor Price then asked the Cabinet to make sure that going forward, they communicated the Council’s financial position clearly and made use of language that the general public would understand. This would allow residents to receive a much clearer picture of where the Council was at, in terms of its finances and what this would mean to residents.

Councillor Bermange then discussed the parking season ticket decrease, which had been mentioned by Councillor Jones. Councillor Hill replied by stating that a review of parking needed to be looked at, and it was planned to come before Cabinet over the next few months.

The Chair seconded the recommendation in the report.

AGREED UNANIMOUSLY: That Cabinet noted:

      i.         the forecast revenue outturn for the year was an overspend on services of £4.900m which reduces to an overspend of £1.520m when including unallocated contingency budgets and changes to funding budgets (para 4).

     ii.         that the Council’s approach to in-year budget monitoring and management was being strengthened – as part of a wider approach to improving corporate governance at RBWM - as set out in paragraph 5.1.

   iii.         the forecast capital outturn was expenditure of £70.325m against a budget of £87.695m (para 10); and

   iv.         agreed the virement in paragraph 11.4 to fund the additional capital costs of £0.101m for the Berkshire Records Office.