Agenda item

The Interim Director of Finance presented the Quarter 1 2023-24 - Financial and Performance Report for Members consideration. Prior to the presentation of the report, it was noted that recommendation 7 contained within the report was no longer being presented at this meeting and would be considered following further information being provided in due course.

Cabinet was informed that the report had been considered at a meeting of the Finance and Budget Scrutiny Working Group as had been requested following the previous Cabinet meeting held on 13^th September 2023.

During consideration of the report the following was noted:

·       Budget Variances – the current forecast revenue Overspend at Quarter 1 £197k. This was mainly due to the staff pay award which was still to be ratified. In addition to this, there would be some additional fleet hire costs experienced. It was explained that the Council would now be refurbishing the fleet rather than replacing. However, some of the vehicles needed to be refurbished sooner than anticipated and, in these instances, whilst the refurbishment was taking place, it was necessary to hire fleet vehicles. It was reported that these kinds of vehicles were in high demand and therefore costly to hire. As a result of these anticipated variances the projection was a full year overspend of £788k. This position would continue to be reviewed particularly in light of the impact of the increasing costs linked to inflation. Further updates would be provided to Members throughout 2023/24.

·       Utilities – It was estimated that Utilities increases were running at 70%.  In the 2023/24 budget a 100% increase was assumed. At this time a reserve was set up to allow for a further 100% increase. Therefore 200% increase had been allowed for in respect of an increase in Utilities. As the increase had not been experienced at this level the assumed yearly draw down of £351k of the reserve could be used to mitigate the £788k overspend. 

• Capital Project and Monitoring – there were three projects that were requested for approval as Capital projects. These were as follows:

1.     The update of Fleet Replacement costs.

2.     Increase in wheely bin budget.

3.     New Capital budget for wildflowers equipment.

·       The cost of Council Staff – it was reported that staff costs equalled almost 50% of payments in Bromsgrove and that appropriate recharges to Redditch were considered when allocating services.

·       The inclusion of procurements within the report in the future – It was reported that as the Council delivered a Shared Service, a number of procurements that impacted on Bromsgrove would be procured through Redditch. 

Members queried the Key Performance Indictors (KPIs) contained within the report and whether these needed to be refreshed as part of the piece of work on Strategic Priorities. It was agreed that this would be the case and that for future KPIs it was important to only measure what was necessary and useful to improve services. It was confirmed that the hope for the future was, through the use of PowerBI, the Council’s new dashboard, that KPIs could be viewed in real time and provide up to date and useful date going forward.

During consideration of this item there was a discussion in respect of Business Waste. Members queried the issues experienced within the finance system regarding invoicing and whether this had been rectified. It was reported that that the issue was close to being sorted and that hopefully the backlog would be cleared by December 2023. Members raised the possibility of looking at the Business Waste charging system as part of the Fees and Charges setting process later in the municipal year. Members were reminded that this was a commercially sensitive area and that any change in fees must be considered carefully as the competition in private waste collection was extremely high.

Some Members queried whether the use of the Utilities reserves might be a risk in light of the current situation in the Middle East. Members were informed that Local Councils were protected to an extent in this area as they used a collective buying consortium through a framework to purchase these types of services.

Members raised their concerns in respect of the Covid Collection Fund, particularly in light of the current enquiry taking place regarding the allocation of funding during the Covid-19 pandemic. Officers stated that it was low risk due to the less prescriptive nature of the funding criteria of this funding.

RESOLVED that

1)    The current financial position in relation to Revenue and Capital Budgets for the period April to June and the full year overspend position following the application of reserves of £437k be noted;

2)    Those procurements over £50k due to be delivered during 2023/24 be added to the forward plan;

3)    The Q1 Performance data for the Period April to June 2023 be noted.

RECOMMENDED that

4)    £351k be allocated from the Utilities Reserve to part mitigate the overspend position in 2023/4.

5)    Changes to the Capital Programme with an ongoing revenue cost of £40k, £17k fleet replacement, £13k Wheely Bins and £10k wild flowers equipment.

6)    Approving the £11.0k increase to the Engineering Services base budget in 2023/4 from reserves and including this change in the 2024/25 Medium Term Financial Plan.