This report details the forecast outturn against budget for the 2023/24 financial year. It includes the revenue and capital budgets along with the financial reserve position at year end.

The report will be considered by Cabinet on 24^th January 2024 and the Panel are provided with an opportunity to further scrutinise the current financial position of the council.

Elizabeth Griffiths introduced the report and explained that it covered the council’s financial position for the month of November 2023. The financial position had deteriorated compared to previous months and there had been a shift in things the council could not control. There had been progress in reducing overspend and demand led services were finding ways to mitigate the increase in costs. The baseline budget was insufficient to deal with the demand currently being seen and it was projected that this increased demand would continue into the next financial year.

Councillor Price noted that reserves should be between 10% and 15% which seemed unachievable, she asked what the level of reserves would be going into the next financial year and how this compared to the level of reserves at the beginning of the year.

Elizabeth Griffiths explained that the council started the financial year with £10 million of reserves. The previous Executive Director of Resources felt that the minimum level should be £7.9 million and this was a subjective calculation. The council was often spending more than it was saving which meant that it was in a vulnerable position. Earmarked reserves had been used to fund spending in year where necessary to reduce overspend. Reserves were significantly depleted and these could be reduced by half going into the next financial year.

Councillor Price asked if the budget would be looked at again if there was no adequate funding in place to deliver some services. She asked if there was any news on how much RBWM would receive from the government from the £500 million pot of funding which had been recently announced for local authorities.

Elizabeth Griffiths commented that the council was trying to find further ways to reduce spending. Now that the draft budget had been finalised, the work needed to take place to ensure that this budget was delivered. She was hopefully that the council would receive around £1 million from the government but given the level of spend in areas like adult social care this would make a relatively small difference.

Councillor Price asked if once the budget was approved in February, that this was confirmation from the S151 officer that she was satisfied with the budget.

Elizabeth Griffiths believed it was about the trajectory, with the balanced budget and transformation work planned it was hoped that the council’s financial position could improve.

Councillor Wilson considered the methodology, with the forecast outturn between month 7 and month 8 worsening by around £650,000. The current overspend was £4.3 million after contingency, he asked if this looked at the current run rate of income and expenditure and projected this looking forward.

Elizabeth Griffiths said that there were a lot of nominals which were considered by the team and were presented as the summary table in the report.

Councillor Wilson asked if there was an update on the level of overdue debt, particularly when considering the current level of the reserves.

Elizabeth Griffiths said that additional resources had been brought in, it was a big risk. Transformation programmes would be charged to capital receipts and this would happen with corporate debt. She also hoped to be able to move some money from the revenue budget, charge it to capital receipts and free up some resources to bring in credit control to further reduce the debt figure.

The Chair mentioned that in his experience, factoring invoices could be explored.

Elizabeth Griffiths confirmed that it was an option open to the council. However, a significant amount of debt would be incurred by residents who were not the best position and this needed to be considered.

Councillor Wilson followed up on an action from the last meeting around Tivoli performance metrics, with a number of metrics way off target. He asked if it was possible to gain some money back from the contract due to underperformance.

Andrew Durrant explained that the team had ongoing dialogue with Tivoli on performance to identify areas which needed to be improved. Improving efficiencies were explored rather than going down the litigation route. Tivoli had been highted as an area of exploration by the Place Overview and Scrutiny Panel.

Councillor Howard supported the principle of trying to improve the contract but this did not overlook the premise that the contract was not being delivered as agreed. He felt that the council was justified in approaching Tivoli to recoup some of the cost of the contract, particularly as Tivoli had saved money by not providing the service to the council.

Councillor Reeves said that there were lessons to be learnt from the Tivoli contract especially when it came up for renewal. He suggested that shared risk and benefits could be a good approach to take. Councillor Reeves commented on adult social care overspend and asked if more leverage could be placed on the government to increase the amount of funding the council received.

Kevin McDaniel reported that local authorities, through the Local Government Association, had highlighted that around £4 billion of additional funding was needed. The amount requested by the Office for Local Government had been around £1 billion and the amount actually received by the government had been £500 million. Officers made the case on a number of different areas directly to the government so that they were fully aware of the challenges that councils faced.

Councillor Reeves felt that this should be communicated directly to the public, so that they understood the lack of funding being received from the government. There was a huge amount of debt that needed to be serviced and he assumed that this would be revaluated, particularly with the interest rate forecast to fall.

Elizabeth Griffiths confirmed that the team were considering interest rate forecasts. However, some debt had been incurred at a low interest rate but was now being refinanced at a much higher rate.

Councillor J Tisi was aware that a significant sum of debt needed to be refinanced in the near future and asked if an update could be provided on this situation.

Elizabeth Griffiths said that only a small amount of the debt in question had been refinanced. Current short term cash flow was being closely monitored to ensure that the council was not borrowing too much to manage short term debt. Further capacity would be added to the team to help assist with forecast projections. The team were trying to shift the balance from just servicing debt to reducing the amount which had been borrowed and not yet been paid back.

Councillor J Tisi considered the estimated impacts, surpluses and pressures which had been outlined in the report. He asked if these amounts had been budgeted, especially as there were more pressures than surpluses.

Elizabeth Griffiths said the tables had been added for greater transparency of the financial position. A number of considerations went into the forecast. There was concern that adult services bad debt would not be cleared by the end of the financial year and this was offsetting savings made.

Councillor Sharpe felt that parking income was an important revenue stream for the council and was usually around £10 million. There was a proposal to increase parking charges, he asked how much this would be projected to raise income by and whether any work had been done to consider the potential impact on businesses.

Andrew Durrant said that there were current in year pressures related to parking and there had been behaviour changes, for example the demand for weekly and annual season ticket. It was a balance and there would be an increase to some parking charges in year. Work had been done with the Town Centre Managers to study the footfall and ensure that an increase in parking charges would not deter people from visiting town centres in the borough. The residents discount on parking had been frozen and would continue going forward. Mobile phone data could be utilised through a parking app to understand usage.

Councillor Sharpe was concerned that residents would visit other town centres instead of those in the borough and suggested that other revenue opportunities should be explored too.

Councillor Hunt queried the comment made on tracking residents through mobile phone data.

She was informed that the system was called Vista Insights, this was related to the permissions set on apps which would ask the resident if they were happy to share location data either while just using the app or at all times. It was an anonymous and secure system which was used by a number of councils and partners.

The Chair considered the outturn variances and that the Place directorate had been trying to soften these variances. He asked if the areas where savings were being made were essential services which could cause issues in future.

Andrew Durrant said that work had been done with contractors to find further efficiencies, grant funding had been utilised and service level delivery had been improved to further save money where possible.

AGREED UNANIMOUSLY: That the Corporate Overview and Scrutiny Panel:

i)             Noted the forecast revenue outturn for the year was an overspend on services of £8.009m which reduced to an overspend of £4.347m when including unallocated contingency budgets and changes to funding budgets.

ii)            Noted the forecast capital outturn was expenditure of £43.960m against a budget of £88.267m.